$8.$ Consumer surplus using utility curves

Suppose Deborah has an allowance of $$49$ to spend on burgers and other goods each month $($represented by budget constraint BG$).$ The following graph shows her initial utility $($U$1$

U

$1$

$)$ at point A from spending $$33$ of her total allowance on three burgers $($$$11$ each$)$ and the remaining $$16$ on other goods.

Note: Select a point on the graph to see its coordinates.

$0$

$11$

$22$

$33$

$44$

$55$

$66$

$60$

$50$

$40$

$30$

$20$

$10$

$0$

MONEY SPENT ON OTHER GOODS

MONEY SPENT ON BURGERS

C

F

B

G

D

E

A

Now suppose Deborah's parents decide not to allow her to eat burgers. As a result, she now spends all of her allowance on other goods, moving her to point $.$ At this point, her utility is it was at point A$.$

Although her parents do not want her to eat burgers, they don't want to reduce the overall utility Deborah gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to eat burgers. This amount is represented by the distance between points and is equal to$.$

The consumer surplus Deborah gets from burgers at point A is equal to which of the following?

The entire area under U$1$

U

$1$

The amount by which her parents increase her allowance

The area between points A$,$ C$,$ and D

The area between U$1$

U

$1$

and her budget constraint