Scenario 8-1
Ryan would be willing to pay as much as $100 per week to have his house cleaned. Tammy's opportunity cost of cleaning Ryan's house is $70 per week.
-Refer to Scenario 8-1.If Ryan pays Tammy $80 to clean his house,Ryan's consumer surplus is
A)$100.
B)$80.
C)$70.
D)$20.

Question

Quizplus · Accepted Answer

Ryan's maximum willingness to pay for cleaning his house is $100. However, he only paid $80, which means his consumer surplus is $20 ($100 - $80). The fact that Tammy's opportunity cost is $70 per week is irrelevant in this case, as it does not affect Ryan's consumer surplus.

Scenario 8-1 Ryan Would Be Willing to Pay as Much as $100