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Chapter 3: Q 49 (page 79)

What term would an economist use to describe what happens when a shopper gets a " good deal " on a product?

Short Answer

Expert verified

Economists use the term consumer surplus when a shopper gets a " good deal " on a product.

Step by step solution

01

Step 1. Meaning of Consumer Surplus.

Consumer surplus is the extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid.

02

Step 2. Explaining the reason.

Economists use the term consumer surplus when a shopper gets a " good deal " on a product. Since it happens when the price actually paid by the consumer is less than the price they are willing to pay.

For example, when the price of a good is $30and the customer after discount pays

$20. Then, there is a consumer surplus which is a great deal for the consumer.

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Most popular questions from this chapter

What is consumer surplus? How is it illustrated on

a demand and supply diagram?

Review Figure 3.4. Suppose the government

decided that, since gasoline is a necessity, its price

should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the gasoline market?

Agricultural price supports result in governments

holding large inventories of agricultural products. Why do you think the government cannot simply give the products away to poor people?

If a price floor benefits producers, why does a price floor reduce social surplus?

How can you locate the equilibrium point on a

demand and supply graph?
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