Asked by
Marucs Zhang
on Oct 12, 2024
Verified
Statement I: Consumer surplus is the difference between what you have to pay and what you would have been willing to pay.
Statement II: A person's total utility reaches a maximum when that person's marginal utility falls to zero.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Consumer Surplus
The discrepancy between the aggregate amount consumers can and will pay for a product or service and the actual amount they pay.
Total Utility
The total satisfaction or benefit received by consuming a given total quantity of a good or service.
Marginal Utility
The additional utility derived from consuming one more unit of some good or service.
- Understand the concept of consumer surplus and how it is determined.
- Comprehend how total and marginal utility impact consumption decisions.
Verified Answer
MJ
Learning Objectives
- Understand the concept of consumer surplus and how it is determined.
- Comprehend how total and marginal utility impact consumption decisions.
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