In the context of consumer surplus and willingness to pay, if the average household spends \$1,200 per month on housing and \$600 per month on food, how much more does the average household spend on housing than on food?

• A. \$2,400
• B. \$300
• C. \$1,800
• D. \$600

Answer: (D)

Verified step by step guidance

1. Identify the monthly spending amounts for both categories: housing and food. Here, housing spending is \$1,200 and food spending is \$600.
2. Understand that the question asks for the difference in spending between housing and food, which means we need to find how much more is spent on housing compared to food.
3. Set up the subtraction to find the difference: subtract the amount spent on food from the amount spent on housing.
4. Write the equation for the difference in spending as: \(\$1,200 - \$600\).
5. Calculate the difference to find how much more the average household spends on housing than on food.