The correct answer is: A. a-1, b-2, c-3, d-4
Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good and the price they actually pay. It is a measure of the benefit that consumers receive from consuming a good.
The concept of compensating variation is a measure of the amount of money that a consumer would need to be compensated in order to be indifferent between their original situation and a new situation in which the price of a good has changed.
A utility index number is a number that measures the level of utility that a consumer receives from consuming a basket of goods.
The input-output model is a model that is used to analyze the interdependencies between different sectors of the economy.
Here is a brief explanation of each option:
- Consumer surplus (a) was first introduced by Alfred Marshall in his book “Principles of Economics”. It is a measure of the benefit that consumers receive from consuming a good. It is calculated as the area below the demand curve and above the price line.
- The concept of compensating variation (b) was first introduced by Hicks in his book “Value and Capital”. It is a measure of the amount of money that a consumer would need to be compensated in order to be indifferent between their original situation and a new situation in which the price of a good has changed.
- A utility index number (c) was first introduced by Fisher in his book “The Purchasing Power of Money”. It is a number that measures the level of utility that a consumer receives from consuming a basket of goods.
- The input-output model (d) was first introduced by Leontief in his book “The Structure of the American Economy”. It is a model that is used to analyze the interdependencies between different sectors of the economy.