Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither. Statement Even though I was willing to pay as much as $35 for a crew neck, I bought a crew neck for just $29. I sold a swimsuit for $61 on OfferUp last week. The next day, someone messaged me offering $195 for it. I sold a polaroid camera for $197, even though I was willing to accept as little as $190 in exchange for it. Consumer Producer Surplus Surplus Neither Training

Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither. Statement Even though I was willing to pay as much as $35 for a crew neck, I bought a crew neck for just $29. I sold a swimsuit for $61 on OfferUp last week. The next day, someone messaged me offering $195 for it. I sold a polaroid camera for $197, even though I was willing to accept as little as $190 in exchange for it. Consumer Producer Surplus Surplus Neither Training

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter7: Market Efficiency And Welfare

Section: Chapter Questions

Problem 5P

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3.a. State and explain the First Theorem of Welfare Economics and discuss its economicimplications and significance.b. State and explain the Second Theorem of Welfare Economics and discuss its economicimplications and significance.c. Explain the concept of production possibility frontier and interpret the slope of theproduction possibility frontier in economic terms.
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
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.
a) Describe the First Welfare Theorem. b) What are the tenets? Please list out with some detail. c) Describe the tenet that is subjective and how our analysis does not do a good job at overcoming this facet. d) Pick one of the tenets and provide an example of when it is violated in the real world and describe how the market outcome and optimal outcome are not aligned.
1. Second Fundamental Theorem of Welfare Economicsa. Describe the theorem, making sure that you define clearly the terms used in thedescription (e.g. if you use the term “efficient” you have to describe what this means).b. Explain why the theorem implies that there is no intrinsic trade-off between efficiencyand interpersonal equity. c. Demonstrate your argument using an Edgeworth box, making sure that you describe allthe elements of the box appropriately.
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.
Suppose the administration of a University that is located a high-crime urban area mustdecide on a policy to increase policing on its campus. The student population is 10,500 students but iscould increase if crime is reduced. The cost of added policing in terms of additional salary and equipmentis estimated to be $2.4 million per year. Suppose the administration plans to make their decision with thehelp of a benefit cost analysis of the policy. VSL is $11.8 million a. Explain how the concept of Value of a Statistical Life might factor into a benefit cost analysis of thispolicy. b. How many lives would need to be save to justify the added policing costs if only prevented deathswere considered as the policy benefit? c. Suppose it is believed that student enrollment will increase in the future if crime on campus is reduced.Write a formula to calculate the present value of benefits of policing if student enrollment increases by4% each year.
Naisa buys an iPhone for $240 and gets consumer surplus of $160.a. What is her willingness to pay?b. If she had bought the iPhone on sale for $180, what would her consumer surplushave been?c. If the price of an iPhone were $500, what would her consumer surplus have been? Answer must be correct.Show step by stepcalculation.
Consider a economy with three goods, a, b and c. The total supply consists 150a, 180b and 120c. There are three consumers 1,2,3 They have the followiing preferences: u1(a,b,c)=a u2(a,b,c)=a+b u3(a,b,c)=1+c a) Identify a competitive equilibrium from euqal incomes in which the price of a and c are equal. b) Find the egalitarian equivalent allocation(EEA is one that gives each agent the same utility as giving the one a fraction x of total supply, for x as large as possible)
Kyra buys an iPhone for $240 and gets consumersurplus of $160.a. What is her willingness to pay?b. If she had bought the iPhone on sale for $180,what would her consumer surplus have been?c. If the price of an iPhone were $500, what wouldher consumer surplus have been?
In the United States, one of the largest welfare programs is the Supplemental NutritionAssistance Program (SNAP) representing the second largest in-kind transfer programfor individuals in the US. From the abstract of the study we are told “[a] 1% increasein benefits per population raises grocery prices by a persistent 0.08%. A calibratedpartial-equilibrium model implies a marginal benefit dollar raises a recipient’s consumersurplus from groceries by $0.7, producer surplus by $0.5, and lowers each non-SNAPconsumer’s surplus by $0.05.” In other words, increasing the size of the in-kind transferleads to higher prices. This higher price results in a larger surplus for grocery stores anda lower consumer surplus for individuals not participating in SNAP. Those individualswho participate in SNAP can increase their overall consumer surplus as they haveaccess to more goods, despite the higher price. This result is estimated using thenearly 100% redemption of the SNAP benefits (i.e. assuming the…
which statement is correct A result of welfare economics is that the price of a product is considered to be the best price because it maximizes total surplus. A seller would be willing to sell a product only if the price received is less than the cost of production. Suppose that the equilibrium wage in the labor market is $8.00 per hour of labor. If a law increased the minimum wage from $7.25 to $10.00 per hour of labor, any possible increase in producer surplus would be smaller than the loss of consumer surplus. In a market, for any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.