Which of the following is typically considered part of a consumer's external social environment when analyzing consumer surplus and willingness to pay?

• A. Cultural norms and peer influences
• B. Personal tastes and preferences
• C. Product quality
• D. Individual income level

Answer: (A)

Verified step by step guidance

1. Understand the concept of a consumer's external social environment: it includes factors outside the individual that influence their behavior, such as cultural norms, social groups, and peer influences.
2. Recognize that consumer surplus and willingness to pay are affected not only by personal preferences but also by social context, which shapes how consumers value goods and services.
3. Identify that 'personal tastes and preferences' and 'individual income level' are internal factors specific to the consumer, not part of the external social environment.
4. Note that 'product quality' is a characteristic of the good itself, not an external social factor influencing the consumer.
5. Conclude that 'cultural norms and peer influences' are external social factors because they come from the consumer's social environment and affect their willingness to pay and perceived consumer surplus.