-Refer to Figure 4 -1. If the market price is US$2.50, what is the consumer surplus on the second ice cream cone?
A) US$1.50
B) US$3.00
C) US$0.50
D) US$10.50

Question

-Refer to Figure 4 -1. If the market price is US$2.50, what is the consumer surplus on the second ice cream cone?
A) US$1.50 
B) US$3.00 
C) US$0.50 
D) US$10.50

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. If the market price is US$2.50 and assuming the willingness to pay for the second ice cream cone is higher than US$2.50, but by the context given, it's less than the first cone's willingness to pay, the exact surplus cannot be determined without the graph. However, based on the options provided and typical understanding of consumer surplus, if the consumer is willing to pay US$3.00 for the second cone (a common assumption for simplicity in such questions), the surplus would be US$0.50 (US$3.00 - US$2.50).