Consumer's surplus is a measure of how much
A)less than his income a consumer spends on goods.
B)more utility a consumer receives from his purchases than he has to pay for them.
C)a consumer's marginal utility differs from his total utility.
D)a change in price induces a consumer to substitute other goods.

Question

Quizplus · Accepted Answer

Consumer's surplus is the difference between the amount a consumer is willing to pay for a good and the actual price they pay. It represents the extra utility or satisfaction that the consumer receives from the good, over and above what they had to pay for it. Thus, option B is correct as it best explains consumer's surplus. Options A, C, and D are not correct as they do not accurately describe consumer's surplus.

Consumer's Surplus Is a Measure of How Much