Chapter 7: Problem 32

If this year's Nobel Prize winner in physics gives a free lecture at your school and just eight people attend, you may conclude that (LO1) a) no one derived any utility from his lecture b) none of the people who attended would have come if there had been an admission fee c) the lecture must have been at an inconvenient time. d) at least some of the people who attended enjoyed a consumer surplus.

Short Answer

Expert verified

The most appropriate conclusion is (d) at least some of the people who attended enjoyed a consumer surplus, as they attended a lecture from a Nobel Prize winner for free, which can be considered as a consumer surplus for those who derived utility from the lecture and were willing to pay for it.

Step by step solution

The utility refers to the satisfaction or benefit a person derives from consuming a good or service. It helps in the understanding of consumer behavior and choices. #step_2# Define consumer surplus

Consumer surplus is the economic benefit that consumers enjoy when they are able to purchase a good or service at a price lower than their willing-to-pay price. It represents the economic gain for the consumer. #step_3# Evaluate each option

Let's analyze each of the given options one by one: a) No one derived any utility from his lecture: This option is not necessarily true, as utility can't be concluded from attendance alone. It is possible that all eight people benefitted from the lecture. b) None of the people who attended would have come if there had been an admission fee: This option is speculative and not necessarily true, since we do not have any information about the willingness of the attendees to pay for the lecture. c) The lecture must have been at an inconvenient time: Again, this option is not necessarily true. The low attendance could be due to many factors, like lack of interest or lack of awareness about the event, but not necessarily the lecture timing. d) At least some of the people who attended enjoyed a consumer surplus: This option seems to be the most logical conclusion as they attended a lecture from a Nobel Prize winner for free. This can be considered as a consumer surplus for those who derived utility from the lecture (assuming they were willing to pay for it). #step_4# Choose the most appropriate option

Based on the analysis, option (d) - at least some of the people who attended enjoyed a consumer surplus - is the most appropriate conclusion given the information provided.

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

Short Answer

Step by step solution

The utility refers to the satisfaction or benefit a person derives from consuming a good or service. It helps in the understanding of consumer behavior and choices. #step_2# Define consumer surplus

One App. One Place for Learning.

Most popular questions from this chapter

Study anywhere. Anytime. Across all devices.