Matt is offered a job driving the campus shuttle bus from 4 p.m. to 6 p.m. each Monday. His reservation wage for this job is $7 per hour. If the campus transportation director offers Matt $50 per hour, how much economic surplus will Matt enjoy as a result of accepting the job?

Question

Quizplus · Accepted Answer

The surplus is the difference between the wage Matt would earn ($50 per hour)and his reservation wage ($7 per hour), which is $43 per hour.

Matt Is Offered a Job Driving the Campus Shuttle Bus