Praxis II: Economics Content Knowledge Exam Prep

Answer - D - Consumer surplus measures the benefit of a buyer in participating in a particular market for goods.

Key Takeaway: The consumer surplus is very closely related to the demand curve for the product that the consumer is in the process of purchasing. The demand curve for the product shows that very maximum prices that different consumers are willing to pay for a particular good, showing the value of that good to the consumers. The consumer’s surplus is simply the different between the maximum price that the consumer would be willing to pay versus the actually price that the consumer has to pay.