Which of the Following Statements Provides the Best Example of Consumer

question 60

Multiple Choice

Which of the following statements provides the best example of consumer surplus?

• A)"Drinking that bottle of soda increased my happiness by $10."
• B)"John gave me $5 for the watermelon even though it cost me only $2."
• C)"I paid $20 for this shirt for which I would have paid up to $40."
• D)"I refuse to pay $30 for their steak dinner;it's highly overpriced."

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Definitions:

Accounting Rate of Return

A method used to determine the profitability of an investment, calculated by dividing the average annual accounting profit by the initial investment cost.

Straight-Line Depreciation

A methodology for dispensing the cost of a durable asset over its useful period in uniform annual allocations.

Accounting Rate of Return

A financial metric used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

After-Tax Income

The amount of money an individual or company retains after all federal, state, and withholding taxes have been deducted from taxable income.