Critique responses to prompt. Point out points that are not correct or controversial.

Answer both response separately

70-100 words each

Prompt:

If the price of a good increases, what happens to consumer surplus?Why?If the price of a good decreases, what happens to consumer surplus? Why?Explain a recent situation in which you purchases a good for more or less than anticipated and what happened to your consumer surplus.

Response:

When the price of a good increases, then the consumer surplus will go down. The surplus refers to the difference between the real cost of the product that was bought and the highest price that one would have been willing to pay for the product. It essentially represents how much you have 'saved' on it. Inversely, when the wanted good's price decreases, the difference will be greater. This means that the surplus will instead go up, as you will be saving more money when you purchase it. One situation with a change to a surplus happened recently to me, involving a certain part for my desktop computer. Over the past few years, activities like crypto-mining have increased demand by a tremendous amount, and a general shortage in silicon for producing parts have made things much more expensive. For a while, I was hoping to wait out the price increases until I could obtain an upgraded part. Unfortunately, when my part broke I had little option left but to buy something to replace it because I didn't have anything of comparable quality to use, since the part was expensive even beforehand. Since the price had gone up, my consumer surplus went way down.

Prompt:

If the price of a good increases, what happens to consumer surplus?Why?If the price of a good decreases, what happens to consumer surplus? Why?Explain a recent situation in which you purchases a good for more or less than anticipated and what happened to your consumer surplus.

Response:

When the price of a good is increased, then consumer surplus is decreased. In this situation, consumer surplus is reduced in two different ways. First, quantity demanded is decreased as fewer buyers will buy the good because they cannot afford to buy the good, or they will not buy it since the increased price is above what they feel that the good's value is worth. Secondly, buyers who buy the good have their own consumer surplus decreased because they are getting less of a deal. Conversely, if the price of a good is decreased, then consumer surplus is increased. Therefore, the quantity demanded increases as more buyers buy the good who previously couldn't afford it or were unwilling to buy it. Other buyers who would have bought it at the increased price now feel they are getting a better deal.

Recently, I purchased a video game that was significantly discounted. Before I purchased the game, I knew what the regular value of the game was worth without the discount. Additionally, I wanted to play this game, and I was even willing to pay the regular value of the game without it being discounted. When I found out that the game was discounted, I was excited that I bought the game at a lower price. This is an example of my individual consumer surplus being increased as the price was lower than I normally would have paid.