Question

Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's willingness to pay is:

Answer 1

$3,500

Step-by-step explanation:

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insert explanation here

Answer 2

$3,500 for the stainless steel refrigerator

Step-by-step explanation:

Michael's willingness to pay is measured by how much he values the refrigerator (and would be willing to pay for it). While Michael's consumer surplus is the amount he was willing to pay for the refrigerator minus the actual price of the refrigerator = $3,500 - $3,000 = $500