Multiple Choice
Which of the following is an example of consumer surplus?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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Which of the following is an example of a price in the context of consumer surplus and willingness to pay?
A
The total utility a consumer receives from a good
B
The difference between willingness to pay and actual payment
C
The amount a consumer actually pays for a good
D
The maximum amount a consumer is willing to pay for a good
Verified step by step guidance1
Understand the concept of 'price' in microeconomics: Price is the actual amount of money a consumer pays to purchase a good or service.
Recall that 'willingness to pay' is the maximum amount a consumer is ready to pay for a good, reflecting the value they place on it.
Recognize that 'consumer surplus' is the difference between willingness to pay and the actual price paid, representing the net benefit to the consumer.
Identify that the 'total utility' is the overall satisfaction or benefit a consumer derives from consuming a good, not the price itself.
Conclude that among the options, the price corresponds to 'the amount a consumer actually pays for a good,' as it directly represents the monetary transaction.
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