Discussion
With respect to the consumer surplus, which of the following statements is not correct ?
Answer: D
The statement that is not correct is that consumer surplus is the extra price paid by the consumer.
Consumer surplus is the difference between what a consumer is willing to pay for a good and what he actually pays. It is a gain the consumer keeps, the benefit received beyond the price paid, not an amount he pays out.
The first two statements give the standard Marshallian definition, and the third describes the surplus loosely as value the consumer receives. Only the last reverses its meaning by turning a benefit into an extra payment.
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