Which of the following is the best example of how a person's value system influences their buying behavior in terms of consumer surplus and willingness to pay?

• A. A consumer chooses to pay a premium for fair-trade coffee because they value ethical sourcing.
• B. A consumer selects coffee based solely on its popularity.
• C. A consumer purchases coffee only when there is a discount.
• D. A consumer buys the cheapest available coffee regardless of its origin.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of consumer surplus and willingness to pay. Consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay. Willingness to pay reflects the maximum price a consumer is ready to pay based on their preferences and values.
2. Step 2: Recognize that a person's value system affects their willingness to pay by influencing how much they value certain attributes of a product beyond just price or popularity.
3. Step 3: Analyze each option to see how the consumer's values impact their buying behavior. For example, paying a premium for fair-trade coffee indicates a higher willingness to pay due to valuing ethical sourcing, which increases consumer surplus despite the higher price.
4. Step 4: Contrast this with other options where decisions are based solely on price or popularity, which do not reflect personal values influencing willingness to pay and consumer surplus.
5. Step 5: Conclude that the best example is the consumer paying a premium for fair-trade coffee because it clearly shows how values (ethical sourcing) increase willingness to pay and affect consumer surplus.