Which of the following statements correctly differentiates between consumer surplus and net benefits?
A) Consumer surplus at different levels of consumption can be calculated mathematically, whereas net benefits at different levels of consumption cannot be estimated.
B) Consumer surplus at different levels of consumption cannot be estimated, whereas net benefits at different levels of consumption can be calculated mathematically.
C) Consumer surplus measures the difference between the willingness to pay for a good and the price paid for the good, whereas net benefits measure the overall satisfaction gained from the consumption of a good.
D) Consumer surplus measures the overall satisfaction gained from the consumption of a good, whereas net benefits measure the difference between the willingness to pay for a good and the price paid for the good.

Question

Quizplus · Accepted Answer

Consumer surplus measures the difference between what a consumer is willing to pay for a good and the price they actually pay for it. Net benefits, on the other hand, measure the overall satisfaction that a consumer derives from the consumption of a good net of the cost of buying it. Therefore, option C correctly distinguishes between these two economic concepts. Option A and B are incorrect because consumer surplus can be calculated at different levels of consumption, while net benefits can be estimated mathematically. Option D is incorrect because it wrongly defines consumer surplus as the overall satisfaction gained from consumption, which is the exact definition of net benefits.

Which of the Following Statements Correctly Differentiates Between Consumer Surplus