Which of the following would be the best example of consumer surplus?
A) Jane does not get cell-phone service because she feels that it is worth less than the $30 a month fee.
B) Sam pays $8 for a haircut that is worth $10 to him.
C) Ralph buys a house for $104,000, the maximum amount that he would be willing to pay for it.
D) Sue purchases a book for $20 and uses a credit card to pay for it.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual price paid. In option B, Sam pays $8 for a haircut that he values at $10, so his consumer surplus is $2 ($10 - $8). Options A and D do not involve a transaction, and option C describes the exact maximum amount the consumer is willing to pay, leaving no surplus.

Which of the Following Would Be the Best Example of Consumer