Challenges in measuring consumer surplus

  1. Explain the challenges in measuring consumer surplus of a free product like major online applications, such as Facebook and Google Search. (250 words)
  2. Explain how to quantify the gains that the internet has brought to consumers. You may be able to tie in opportunity costs, and the amount of time saved (or wasted) using the internet. (250 words)
  3. Respond to the following discussion posted by a classmate : 

 

Through the internet, time and money are saved. This is because it is much cheaper and quicker to transfer information around. It also becomes faster and efficient to contact a business partner or a relative. We can now communicate with anyone around the world through emails and text messages instantly. It is so cheap to send an email to another country than making a phone call the internet has indeed brought people closer, and also helped in economic growth. It has also brought down geographical and language boundaries. The internet helps to improve the education. There are billions of sources that people can learn, study and research on the Internet. The Internet also makes more business opportunities. Information communication technology has made it easier for businesses to be automated allowing customers to contact them 24/7. This means that a company can be opened anywhere, anytime, allowing clients to make purchases from different countries.

However, everything has its own opportunity cost. As we know the Internet also is a tool that can help us to relax, take a rest or communicate with your friends, family. But when you spend more time on the Internet, you will lose the time for the real direct social communication with the outside world. Less accessing to the outside world and just staying with the Internet 24/24 will make people sick a lot. Although the internet has made communication easier, quicker and convenient, privacy problems have emerged. From email hacking to phone signal interceptions, more and more people are now troubled about their private information.

So, although the internet has definitely made our lives better, it also has the power to cause mayhem. Its impact on a society or a company is mostly felt by the choices we make while using it. But with wise use, we can be able to reap the benefits, and avoid many of its disadvantages, which means increasing opportunity and decreasing the cost.

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