Phil and Lasca have always wanted to take a cruise. Although willing to pay $5,000 for a Caribbean cruise for two, they bought two tickets for the cruise vacation for $3,500. Their total consumer surplus amounted to _____.
A)$750
B)$5,000
C)$1,500
D)$3,500
E)$500

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual amount they paid for it. In this case, Phil and Lasca were willing to pay $5,000 for the cruise, but they only paid $3,500, so their consumer surplus is $1,500 (Option C). The other answer options are not correct because they either do not take into account the actual amount paid for the cruise or overestimate the consumer surplus.

Phil and Lasca Have Always Wanted to Take a Cruise