Josh Is Willing to Pay $40 for a Haircut,but He

question 450

Multiple Choice

Josh is willing to pay $40 for a haircut,but he is able to pay $25 at the local salon.His consumer surplus is

• A) $0 because the cost exceeds his maximum willingness to pay.
• B) $15.
• C) $25.
• D) $65.

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Definitions:

Microeconomist

An economist who specializes in microeconomics, the study of the behavior of individuals and firms in making decisions on the allocation of limited resources.

Inflation Rate

The speed at which the generic pricing for goods and services elevates, undercutting the force of buying potential.

Macroeconomics

A branch of economics that studies how an economy as a whole functions, including total national income, total levels of employment, and how general price levels are determined.

Economy-Wide Phenomena

Broad trends or occurrences that affect the overall economic system, including inflation, unemployment, and national income.