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Now suppose Beth's parents decide not to allow her to eat burgers. As a result, she now spends all of her allowance on other goods, moving her to point . At this point, her utility is it was at point A. Although her parents do not want her to eat burgers, they don't want to reduce the overall utility Beth gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to eat burgers. This amount is represented by the distance between points and is equal to S The consumer surplus Beth gets from burgers at point A is equal to which of the following? The distance between point C and point D O The area between points A, D, and B O The entire area under U₁ O The area between points G and E

Now suppose Beth's parents decide not to allow her to eat burgers. As a result, she now spends all of her allowance on other goods, moving her to point . At this point, her utility is it was at point A. Although her parents do not want her to eat burgers, they don't want to reduce the overall utility Beth gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to eat burgers. This amount is represented by the distance between points and is equal to S The consumer surplus Beth gets from burgers at point A is equal to which of the following? The distance between point C and point D O The area between points A, D, and B O The entire area under U₁ O The area between points G and E

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 1PA
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8. Consumer surplus using utility curves Suppose Beth has an allowance of $44 to spend on burgers and other goods each month (represented by budget constraint CF). The following graph shows her initial utility (U₁) at point A from spending $27 of her total allowance on three burgers ($9 each) and the remaining $17 on other goods. Note: Select a point on the graph to see its coordinates. MONEY SPENT ON OTHER GOODS 60 8 9 8 20 B 10 0 D 0 9 G 18 27 36 MONEY SPENT ON BURGERS F 45 54 E ?
Transcribed Image Text:8. Consumer surplus using utility curves Suppose Beth has an allowance of $44 to spend on burgers and other goods each month (represented by budget constraint CF). The following graph shows her initial utility (U₁) at point A from spending $27 of her total allowance on three burgers ($9 each) and the remaining $17 on other goods. Note: Select a point on the graph to see its coordinates. MONEY SPENT ON OTHER GOODS 60 8 9 8 20 B 10 0 D 0 9 G 18 27 36 MONEY SPENT ON BURGERS F 45 54 E ?
Now suppose Beth's parents decide not to allow her to eat burgers. As a result, she now spends all of her allowance on other goods, moving her to point . At this point, her utility is it was at point A. Although her parents do not want her to eat burgers, they don't want to reduce the overall utility Beth gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to eat burgers. This amount is represented by the distance between points and is equal to S The consumer surplus Beth gets from burgers at point A is equal to which of the following? The distance between point C and point D O The area between points A, D, and B The entire area under U₁ O The area between points G and E
Transcribed Image Text:Now suppose Beth's parents decide not to allow her to eat burgers. As a result, she now spends all of her allowance on other goods, moving her to point . At this point, her utility is it was at point A. Although her parents do not want her to eat burgers, they don't want to reduce the overall utility Beth gets from her allowance; therefore, they decide to increase her total monthly allowance by just enough to make her as happy as she was when she was allowed to eat burgers. This amount is represented by the distance between points and is equal to S The consumer surplus Beth gets from burgers at point A is equal to which of the following? The distance between point C and point D O The area between points A, D, and B The entire area under U₁ O The area between points G and E
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