Question : Assertion: The concept of consumer surplus represents the difference between the price a consumer is willing to pay and the actual price they pay for a good.
Reason: Consumer surplus reflects the additional benefit or utility the consumer receives from purchasing a good.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct option is (a) Option A Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion states that the concept of consumer surplus represents the difference between the price a consumer is willing to pay and the actual price they pay for a good, which is true.
The reason provided explains that consumer surplus reflects the additional benefit or utility the consumer receives from purchasing a good, which is also true. Consumer surplus represents the difference between the maximum price a consumer is willing to pay (their willingness to pay) and the actual price they pay. It measures the additional benefit or utility that the consumer gains from paying less than their maximum willingness to pay.
Question : Assertion: The concept of marginal utility becomes irrelevant when the consumer faces perfect competition.
Reason: In perfect competition, the consumer is a price taker and must accept the market price without considering individual preferences.
Question : Assertion: The substitution effect and income effect both contribute to the downward-sloping demand curve.
Reason: The substitution effect occurs when the consumer switches to a cheaper alternative, while the income effect reflects changes in purchasing power due to price changes.
Question : Assertion: Price is the sole determinant of a product's value in the market.
Reason: Price is influenced by various factors and reflects the value perceived by customers.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
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