Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Total Revenue
B
Opportunity Cost
C
Total Utility
D
Producer Surplus
Understanding the Answer
Let's break down why this is correct
Answer
Marginal benefit and marginal cost are concepts that help us understand decision-making. Marginal benefit is the extra satisfaction or value you get from consuming one more unit of a good or service, while marginal cost is what you give up to get that extra unit. In the same way, consumer surplus refers to the difference between what a consumer is willing to pay for a product and what they actually pay. Therefore, the relationship can be seen as consumer surplus being similar to the difference between marginal benefit and marginal cost. For example, if you are willing to pay $10 for a pizza but only pay $7, your consumer surplus is $3, which shows the extra benefit you received.
Detailed Explanation
Consumer surplus is the extra benefit people get when they pay less than what they are willing to pay. Other options are incorrect because Total revenue is the money a business makes from selling goods; Opportunity cost is what you give up when you make a choice.
Key Concepts
Marginal Analysis
Consumer Surplus
Opportunity Cost
Topic
Marginal Analysis
Difficulty
medium level question
Cognitive Level
understand
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