The market for apples in the Okanagan Valley operates as a competitive market. Spencer and Gabriella each purchase 4 boxes of apples. If Spencer's demand is much more elastic than Gabriella's. Which statement is true? O A. Spencer receives no consumer surplus. O B. Gabriella's consumer surplus exceeds Spencer's. O C. Gabriella's consumer surplus equals Spencer's. O D. Spencer's consumer surplus exceeds Gabriella's.

The market for apples in the Okanagan Valley operates as a competitive market. Spencer and Gabriella each purchase 4 boxes of apples. If Spencer's demand is much more elastic than Gabriella's. Which statement is true? O A. Spencer receives no consumer surplus. O B. Gabriella's consumer surplus exceeds Spencer's. O C. Gabriella's consumer surplus equals Spencer's. O D. Spencer's consumer surplus exceeds Gabriella's.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 4PA

See similar textbooks

Similar questions

only typed answer Albin’s inverse demand function for pretzels is p( q) = 49 – 6 q, where q is the number of pretzels that he consumes. Currently, the price is $1 per pretzel. If the price of pretzels rises to $7 per pretzel, the change in Albin’s consumer surplus is a. –$56. b. –$42. c. –$45. d. –$90. e. –$42.
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.
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 _______.
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.
Suppose broccoli and Velveeta are complements in consumption. Suppose further that the supply of broccoli is increasing. Everything else held constant, consumer surplus in the Velveeta market will _____ and economic surplus in the Velveeta market will _____.
Suppose Jolene buys apples weekly. If the price of apples were to drop, Jolene would experience in . a decrease an increase a decrease an increase a decrease total revenue consumer surplus her budget constraint marginal utility willingness to pay Suppose the government levies a tax of $0.50 per pack on the buyers of cigarettes. Suppose also that the price elastic- ity of demand for cigarettes is 1.2 and the price elasticity of supply is 0.7. Because this tax is levied on the sale of a speciﬁ c good, it is an excise tax. a progressive tax. a regressive tax. a proportional tax. a lump-sum tax. After this tax is levied, total surplus will , and the price received by producers (not including the tax) will . increase decrease increase decrease increase increase by exactly $0.50 fall by exactly $0.50 fall by less than $0.50 fall by less than $0.50 increase by more than $0.50 If economists were to study the tax incidence in this cigarette market, they would…
Suppose that a consumer perceives X and AOG (all other goods) to be perfect (one-for-one) substitutes. The consumer has an income of $100 and the price of x is 80 cents. If the price of x rises to 1.20, what is the resulting change in consumer surplus? Show work and explain
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.
] 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.
(Look At image to solve these) a. What is the consumer surplus in the equilibrium? b. Suppose there is an increase in the cost of producing flash drives such that the quantity demanded decreases by 1,000 units for each price. What is the consumer surplus at the new equilibrium?
Total surplus is maximized at the equilibriumprice and quantity. When demand increases,price increases. Explain how total surplus is stillmaximized if price increases due to an increase indemand
9) Jonathan spends his income (M) on good X and Y. His preferences are represented by theutility function(X, Y) = Ln X + LnY.The price of good Y is 1 and the price of good X is PX.(a) Derive his demand for X and Y. (b) Jonathan’s father considers X and Y as merit goods and wants to encourage his son toconsume more of them by offering him a subsidy of $1 for every unit of X that hepurchases. Suppose the initial price of X is $2, derive the substitution effect ofJonathan’s demand for X with the subsidy when his income is $20.(c) Does the subsidy increase Jonathan’s consumption of Y?(d) How does the subsidy affect Jonathan’s total spending on X and Y.(e) Instead of offering the subsidy, the father decides to spend the same amount of moneyon Jonathan by offering him an income supplement. Is this a better alternative thanthe unit subsidy in achieving the father’s objective? 12(a) Consider a perfectly competitive industry with several identical firms.The cost function of a price-taking firm…