Which of the Following Would Be the Best Example of Consumer

question 167

Multiple Choice

Which of the following would be the best example of consumer surplus?

• A) Jane pays $30 a month for phone service even though it is worth $70 to her.
• B) Sam refuses to pay $10 for a hair cut because it is only worth $8 to him.
• C) Fred buys a car for $4,000, the maximum amount that he would be willing to pay for it.
• D) When Sue purchases a candy bar for $.50, she uses a $20 bill to pay for it.

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Definitions:

Alternative Hypothesis

In statistical analysis, the hypothesis that proposes a difference or relationship between two variables, counter to the null hypothesis.

SRS

A sampling method where each element of a population has an equal chance of being selected, ensuring that the sample represents the population fairly.

Null Hypothesis

A hypothesis that suggests there is no statistical significance in the given set of observations, often denoted as H0 and used as a default hypothesis to be tested.

Significance Level

A threshold chosen by the researcher which denotes the probability of rejecting the null hypothesis when it is actually true, often denoted as alpha.