Which statement is false?
A)A product's utility to a buyer is measured by how much the buyer is willing to pay for it.
B)A person would maximize her total utility when she had no consumer surplus.
C)We will consume a service when its marginal utility is equal to its price.
D)As the price of a good rises the consumer surplus decreases.

Question

Quizplus · Accepted Answer

This statement is false because a person would actually maximize her total utility when her consumer surplus is maximized. Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the price they actually pay. When a consumer is able to obtain the good or service at a lower price than their maximum willingness to pay, they receive a surplus in their utility. Therefore, maximizing consumer surplus would lead to maximal total utility.

Which Statement Is False