Question : Statement 1: Consumer surplus represents the difference between the price a consumer is willing to pay for a good and the price they actually pay.
Statement 2: Consumer surplus reflects the additional satisfaction gained by the consumer from purchasing the good.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statement 1 and statement 2 are true.
Option 4: Both statement 1 and statement 2 are false.
Correct Answer: Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Option A: Statement 1 is true, and statement 2 is false.
Statement 1 is true. Consumer surplus represents the difference between the price a consumer is willing to pay for a good and the price they actually pay. It measures the economic benefit that consumers receive from purchasing a good at a price lower than what they are willing to pay.
Statement 2 is false. Consumer surplus does not directly reflect the additional satisfaction or utility gained by the consumer from purchasing the good. It is a measure of economic welfare rather than a direct measure of satisfaction or utility.
Question : Statement 1: The concept of consumer surplus represents the additional satisfaction gained by consuming a good.
Statement 2: Consumer surplus can be calculated by finding the difference between the total utility and the marginal utility of the last unit consumed.
Question : Statement 1: The concept of consumer surplus measures the difference between the consumer's total expenditure and the maximum amount they are willing to pay.
Statement 2: Consumer surplus can be represented graphically as the area below the demand curve and above the market price.
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.
Question : Statement 1: Marginal utility is the additional satisfaction derived from consuming one additional unit of a good.
Statement 2: The law of diminishing marginal utility states that as a consumer consumes more of a good, the additional satisfaction derived from each additional unit decreases.
Question : Statement 1: The slope of the budget line represents the relative price of two goods.
Statement 2: The consumer achieves equilibrium when the marginal rate of substitution is equal to the relative price of the goods.
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