Questions&+Answers

Questions 1. What does willingness to pay measures? the value that a buyer places on a good. 2. What is a consumer surplus? 3. Define welfare economics. 4. What does consumer's willingness to pay directly measure? 5. When buyers willingness to pay is the same as the price of the good, how does the buyer feel about purchasing it?  Answers 1.The value a consumer puts on a good 2. The difference between the amount that a consumer actually pays for a good and the amount that the consumer is willing to pay for the good. 3. The study of how the allocation of resources affects economic well-being 4. The value the consumer places on the good 5. The buyer is indifferent. He or she will be happy if they don't buy it and if they buy it.