1. Determine the amount of consumer surplus generated in each of the following situationsWilliam goes to the clothing store to buy a new T-shirt, for which he is willing to payup to $10. He picks out one he likes with a price tag of exactly $10. At the cashregister, he is told that his T-shirt is on sale for half the posted price.b. Sophia goes to the CD store hoping to find a used copy of the Eagles Greatest Hits forup to $10. The store has one copy selling for $10c. After baseball practice, Nicholas is willing to pay $2 for a bottle of mineral water. The7-Eleven sells mineral water for $2.25 a bottle.а.

Consumer surplus can be understood as the benefit to the buyers. The formula for consumer surplus…

Answered: 1. Determine the amount of consumer…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter7: Market Efficiency And Welfare

Section: Chapter Questions

Problem 2P

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] It is a hot day, and Elmo is thirsty. Here is the value of Elmo places on a bottle of water:] Value of first bottle $7 Value of second bottle $5 Value of third bottle $3 Value of fourth bottle $1 From this information, derive Elmo’s demand schedule. Then graph his demand curve for bottled water. If the price of a bottle of water is $4, how many bottles does Elmo buy? How much consumer surplus does Elmo get from his purchases? Show Elmo’s consumer surplus in your graph. If the price falls to $2, how does quantity demanded change? How does Elmo’s consumer surplus change? Show these changes in your graph.
It is a hot day and Bert is thirsty. Here is the value he places on a bottle of water: Bottle of Water Value Value of first bottle $7 Value of second bottle $5 Value of third bottle $3 Value of fourth bottle $1 From this information, derive Bert’s demand schedule. Graph his demand curve for bottled water. If the price of a bottle of water is $4, how many bottles does Bert buy? How much consumer surplus does Bert get from his purchases? Show Bert’s consumer surplus in your graph. If the price falls to $2, how does quantity demand change? How does Bert’s consumer surplus change? Show these changes in your graph.
Q 2::: It is a hot day, and Bert is thirsty. Here is the value he places on a bottle of water: Value of first bottle $7 Value of second bottle 5 Value of third bottle 3 Value of fourth bottle 1 a. From this information, derive Bert’s demand schedule. Graph his demand curve for bottled water. b. If the price of a bottle of water is $4, how many bottles does Bert buy? How much consumer surplus does Bert get from his purchases? Show Bert’s consumer surplus in your graph. c. If the price falls to $2, how does quantity demanded change? How does Bert’s consumer surplus change? Show these changes in your graph.
Marcia spends her money on tee and biscuits and sugar, which she sees as perfect complements. She eats two biscuits with every cup of tea. A cup of tea costs $2 and one biscuit costs $0.2, and she spends $33.60 on tea and biscuits every week. Use a diagram measuring the number of biscuits on the horizontal axis to show her compensated variation and equivalent variation if the price of a biscuit decreases to $0.1. What can you say about the change in her consumer surplus?.
You are considering shoplifting a head of broccoli from the farmer’s market in SLO. Your buyer value for the broccoli is $1.75. The broccoli is available for legal purchase for $1.50. For comparison purposes, assume that if you don’t steal the broccoli, you will make the choice that makes you best off within the law. Which statement below is correct? Group of answer choices: -Stealing the broccoli leads to an increase in total surplus but also causes a reduction in surplus for owners of the broccoli. -Stealing the broccoli leads to a decrease in total surplus and also cause a reduction in surplus for owners of the broccoli. -Stealing the broccoli leads to an increase in total surplus and does not harm anyone else. -Stealing the broccoli does not lead to an increase or decrease in total surplus and also causes a reduction in surplus for owners of the broccoli.
3. It is a hot day, and Nina is thirsty. Here is the value, in money terms, she places on a bottle of lemonade:Value of first bottle £7Value of second bottle £5Value of third bottle £3Value of fourth bottle £1(i) From this information, derive Nina’s demand schedule. Graph her demand curve for bottled lemonade.(ii) If the price of a bottle of lemonade is £4, how many bottles does Nina buy? How much consumer surplus does Nina get from her purchases? Show Nina’s consumer surplus on your graph.(iii) If the price falls to £2, how does quantity demanded change? How does Nina’s consumer surplus change? Show these changes on your graph.
1. It is a hot day, and Seth is thirsty. Here is the value he places on each bottle of water. Value of first bottle P7 Value of second bottle P5 Value of third bottle P3 Value of fourth bottle P1 a. Form this information, derive Seth's demand schedule. Graph his demand curve for bottled water. b. If the price of a bottle of water is P4, how many bottles does Seth buy? How much consumer surplus does Seth get from his purchase? Show Seth's consumer surplus in your graph. c. If the price falls to P2, how does Seth's consumer surplus change? Show these changes in your graph.
Assume the price of a particular paint brush is $3.50. Denise purchases the paint brush for $3.50 but was wiling to pay $5.00. Ted purchases the paint brush for $3.50 but was willing to pay $4.00. What is the total consumer surplus for Denise and Ted? Group of answer choices $2.00 $4.00 $5.00 $3.55 $1.50
4 d'Artagnan, Athos, Porthos, and Aramis are good friends and passionate readers of modern fiction. When Alexandre Dumas's new book 'The Three Musketeers' came out last month, they all went to buy a copy. The price was 5 francs. Their willingness to pay were as follows: d'Artagnan: 35 francs, Athos: 30 francs, Porthos: 25 francs, and Aramis: 20 francs. Assuming there was no shortage of the book, the total consumer surplus was 110 francs 70 francs 90 francs 50 francs We cannot compute the total consumer surplus without information about the costs.
Larry purchases a book for $10, and his consumer surplus is $3. How much is Larry willing to pay for the book?
Janice is willing to pay $100 for the first pair of shoes, $80 for the second pair, $50 for a third, and $30 for a fourth. If shoes cost $50, Janice will buy _____ pairs of shoes and her total consumer surplus will equal _______.
2. Individual demand and consumer surplus Consider the market for antique cars. The market price of each antique car is $180,000, and each buyer demands no more than one antique car. Suppose that Jake is the only consumer in the antique car market. His willingness to pay for an antique car is $315,000. Based on Jake's willingness to pay, the following graph shows his demand curve for antique cars. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).

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