Question 45

The consumer surplus is $8.

The consumer surplus is calculated as the difference between what a consumer is willing to pay and what they actually pay. In this case, the shopper was willing to pay $25 for the shirt but only paid $17, resulting in a consumer surplus of $8.

A) The producer surplus is $25

This option is incorrect because producer surplus refers to the difference between the amount a producer is paid for a good versus the minimum amount they would accept to produce it. The information provided does not indicate anything about the producer’s minimum acceptable price, making this option irrelevant.

B) The consumer surplus is $25

This option is incorrect as it misrepresents the calculation of consumer surplus. The consumer surplus is specifically the difference between the willingness to pay ($25) and the actual purchase price ($17), which is $8, not $25.

C) The producer surplus is $17.

This option is not valid in the context of the question. Producer surplus cannot be determined based solely on the price the shopper paid for the shirt. The correct calculation requires knowledge of the minimum price the producer would accept, which is not provided here.

D) The consumer surplus is $8.

This option is correct as it accurately reflects the calculation of consumer surplus. The consumer surplus is derived from the difference between the shopper's willingness to pay ($25) and the actual purchase price ($17), resulting in a surplus of $8.

Conclusion

Option D is the only choice that correctly identifies the consumer surplus based on the provided values. The other options either misinterpret the definitions of consumer and producer surplus or lack the necessary context to be considered correct. Therefore, option D definitively represents the correct calculation of consumer surplus in this scenario.