7. Consumer surplus for an individual and a market The following graph shows Shen's weekly demand for apple pie, represented by the blue line. Point A represents a point along his weekly demand. The market price of apple pie is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) 7.50 6.75 6.00 5.25 Demand 4.50 3.75 3.00 2.25 1.50 0.75 0 Price 2 Shen's Weekly Demand 4 8 8 10 12 QUANTITY (Slices of apple pie) 18 20 From the previous graph, you can tell that Shen is willing to pay 5 per slice, the consumer surplus he gains from the 8th slice of apple pie is 5 ? for his 8th slice of apple pie each week. Since he has to pay only $3.00 Suppose the price of apple pie were to fall to $2.25 per slice. At this lower price, Shen would receive a consumer surplus of $ slice of apple pie he buys. The following graph shows the weekly market demand for apple pie in a small economy. from the 8th Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of apple ple is $3.00 per slice. Then, use

7. Consumer surplus for an individual and a market The following graph shows Shen's weekly demand for apple pie, represented by the blue line. Point A represents a point along his weekly demand. The market price of apple pie is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) 7.50 6.75 6.00 5.25 Demand 4.50 3.75 3.00 2.25 1.50 0.75 0 Price 2 Shen's Weekly Demand 4 8 8 10 12 QUANTITY (Slices of apple pie) 18 20 From the previous graph, you can tell that Shen is willing to pay 5 per slice, the consumer surplus he gains from the 8th slice of apple pie is 5 ? for his 8th slice of apple pie each week. Since he has to pay only $3.00 Suppose the price of apple pie were to fall to $2.25 per slice. At this lower price, Shen would receive a consumer surplus of $ slice of apple pie he buys. The following graph shows the weekly market demand for apple pie in a small economy. from the 8th Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of apple ple is $3.00 per slice. Then, use

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 3.7P

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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.
June's evaluation of packets of nacho chips in terms of $MU is as follows: 1st packet: $4; 2nd packet: $3.50; 3rd packet: $2.90; 4th packet: $2.30; 5th packet: $1.60. If the price of nacho chips is $1.50, and June buys 5 packets, calculate her marginal consumer surplus for each packet and the total consumer surplus form all 5.
only typed answer A consumer has inverse demand of p=15−1q for a good and the market price is $4.00. Calculate consumer surplus and the total value of the good for the corresponding quantity consumed. Consumer surplus is $enter your response here. (Enter your response rounded to two decimal places.) The consumer's expenditure for the good is $enter your response here. (Enter your response rounded to two decimal places.)
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.
Neha buys an iPhone for $240 and gets a consumer surplus of $160. Her willingness to pay for an iPhone is . If she had bought the iPhone on sale for $180, her consumer surplus would have been . If the price of the iPhone had been $500, her consumer surplus would have been
6 Consumer surplus for an entire market is calculated by Select one: Finding the area above the demand curve but below the market price Adding up all the individual total surpluses Adding up all the individual consumer surpluses Multiplying the market price by the market quantity
3. Consumer surplus for a group of consumers The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for smartphones. The market price of a smartphone is shown by the black horizontal line at $120. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Kevin, green (triangle symbols) for Maria, purple (diamond symbols) for Rajiv, tan (dash symbols) for Simone, and blue (circle symbols) for Yakov. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at a market price of $120. (Note: If a person will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
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 _______.
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.
USE TABLE #1: Now, assume the market for electric automobiles is an efficient market. The consumer surplus for the market for electric automobiles is $_____. (Remember to use a comma, if a comma is needed and to include the decimal point and two numbers to the right of the decimal point).
7. The demand equation for a product isq=3√540-3pCalculate consumers' surplus under market equilibrium, whichoccurs at a price of $100.
11. Differentiate between the consumer and producer surplus. Explain.