If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Question

BlackTom AI · Accepted Answer

Consider the scenario: Darby values a soccer ball at $50 and pays $40. 
Option 1: True. This would assert that the consumer surplus is $90. That would require the difference between value and price to be $90, but the actual difference is $50 - $40 = $10. Therefore, stating $90 as the surplus is incorrect. 
Option 2: False. The correct calculation for consumer surplus is willingness to pay minus the price paid. Here, $50 − $40 = $10, not $90. So the claim that the consumer surplus is $90 is not accurate. 
Additional nuance: Consumer surplus reflects the extra happiness or benefit a buyer gets by paying less than what they’re willing to pay. In this case, the gain from the transaction is $10, exactly the gap between value and price. Misplacing the numbers would imply an unrealistic gain and conflicts with the basic definition of consumer surplus. 
In summary, the assertion in the prompt overstates the surplus, while the underlying concept and calculation show a $10 surplus for this transaction.

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

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