When the Smiths were shopping for their present home, the asking price from the previous owner was $250,000.00. The Smiths had decided they would pay no more than $245,000.00 for the house. After negotiations, the Smiths actually purchased the house for $239,000.00. They, therefore, enjoyed a consumer surplus of
A) $239,000.00.
B) $5,000.00.
C) $6,000.00.
D) $11,000.00.

Question

Quizplus · Accepted Answer

The consumer surplus is the difference between the maximum price the Smiths were willing to pay ($245,000) and the price they actually paid ($239,000), which is $6,000.

When the Smiths Were Shopping for Their Present Home, the Asking