After Trying on a Dress, a Consumer Assesses It to Be

question 17

Multiple Choice

After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as?

• A) the producer surplus
• B) the firm's cost (C) in manufacturing the dress
• C) the consumer surplus
• D) the value (V) the consumer attaches to the dress

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Definitions:

Direct Labour Used

The total effort, measured in hours or costs, of workers directly involved in the manufacturing process of a product.

Variable Manuf. Overhead

Costs that vary with production volume, such as utilities and materials used in manufacturing.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, valued at standard cost.

Variable Manufacturing Overhead

Indirect manufacturing costs that vary with the production volume, such as utilities for machinery.