Willingness to pay (WTP) measures the minimum amount an individual is willing to pay in order to obtain a good or service.

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BlackTom AI · Accepted Answer

Willingness to pay (WTP) is a concept used in consumer theory and welfare economics to capture the maximum amount a person is willing to give up to obtain a good or service. 
Option 1: 'True' — This would assert that WTP equals the minimum amount a person is willing to pay. This is inconsistent with the standard definition, which is about the highest price a consumer would voluntarily pay given the perceived benefit. Therefore, labeling WTP as a minimum payment would be incorrect.
Option 2: 'False' — This aligns with the correct understanding that WTP is the maximum amount a person is willing to pay, not the minimum. The statement in the question essentially reverses the proper meaning, making this option the accurate negation.
Additional nuance: Some readers confuse WTP with willingness to accept (WTA) or with willingness to pay more than the market price in order to obtain additional benefits, but the canonical WTP definition centers on the maximum amount acceptable to obtain the good or service. Hence, the claim that WTP measures a minimum amount is the source of the falsehood in the statement.

25_4 ECN4010A Economics of Public Policy

Willingness to pay (WTP) measures the minimum amount an individual is willing to pay in order to obtain a good or service.

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