Consumer surplus is
A) the same as total utility.
B) the marginal value that consumers place on their purchases.
C) the same as Karl Marx's notion of surplus value.
D) the total value that consumers place on their purchases.
E) the sum of the extra value placed on each unit of a commodity above the market price paid for each.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the total value or utility that consumers place on a good and the market price that they actually pay for it. It is the sum of the extra value placed on each unit of a commodity above the market price paid for each, hence option E is correct. Choices A, B, and D are incorrect because they do not capture the essence of consumer surplus. Choice C is incorrect because it is not related to consumer surplus but rather Marx's theory of exploitation in the context of labor and capital.

Consumer Surplus Is