JAMB Economics 2011 Objective — Question 8
Question 8 of 49 from the Joint Admissions and Matriculation Board (JAMB) Economics 2011 Objective paper, with the correct answer and a full explanation.
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A consumer surplus measures the
- A. A. excess of total expenditure over total utilityCorrect
- B. B. difference between marginal utility and marginal cost
- C. C. excess of marginal utility over price
- D. D. benefits derived from consuming a cheap commodity
Explanation
The consumers' surplus is the difference between total expenditure of a consumer and its expected (planned) expenditure. The planned expenditure is the total utility; it can be represented as consumers' surplus = pq - ∫qdp, where p = price and q = quantity.
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