Microeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859484
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Chapter 14, Problem 13E
To determine
To explain:
The meaning of loss of
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explain the Other Interpretations of Consumer Surplus in microeconomics
Please answer the correct answer please
Don't answer by pen paper please
if a consumer is willing to pay $20 for a pizza, but the price of the pizza is $10, then the consumer surplus resulting from the customer's purchase of the pizza is
Once the buyer and seller agree on a price and exchange the product, a total surplus is "realized" as the "gains from trade."
True or false?
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- If the actual market price of potato chips is $2.50, and steve buys five bags as shown, what is the value of his consumer surplus?arrow_forwardWhat is the value of the consumer surplus if the market price is $15? Group of answer choices $10 $5 $20 $30arrow_forwardIf demand is P = 80 - 2Q and supply is P = 20 + 3Q, what is the value of the Consumer Surplus?Enter as a value.arrow_forward
- Quantity = 0 4 8 12 16 20 Price = 10 8 6 4 2 0 If the purchase price is set to 5, What is the consumer surplus when Q = 16 What is the consumer surplus when Q= 4 What is the maximum amount of surplus ?arrow_forwardSefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the service to each of them is $50 and it costs $80 to hire a housecleaner. Should they hire a housecleaner? A. Yes, if each contributes $50, then each stands to gain a consumer surplus. B. No, because each will wait for the other to hire the housecleaner. C. Yes, but only if a housecleaner will accept $50 so that each can take turns to pay the housecleaner. D. No, because it will be difficult for them to agree on which housecleaning service to use.arrow_forwardConsumer surplus is calculated by taking the difference of the price consumers are willing to pay and the price actually paid. When the price is $4, the consumer would buy only two bottles because the value the consumer would get from the first bottle is $7. This implies, the surplus is $3. Similarly for the second bottle, the value the consumer would get from consuming it is $5 where the price the consumer will pay is $4, this implies the surplus is $1. Lastly, for the third bottle the value is $3 and the price is $4 so the price surpasses the value, therefore the consumer will not consumer beyond two bottles. The consumer surplus could be calculated as: Consumer Surplus = (7-4) + (5-4) = 3 + 1 = 2 This means the consumer will buy two bottles. If the price falls to $2, the consumer would only buy three bottles because the value the consumer gets from the first bottle valued at $7 versus the $2 paid implies a consumer…arrow_forward
- What is the term for a situation where an individual or firm has a higher willingness to pay for a good than the market price? A. Consumer surplus B. Producer surplus C. Deadweight loss D. Indifference curvearrow_forwardThe rent on an apartment in a particular building near campus is $1,200 per month. If Min would be willing to pay up to $1,400, Genevieve would be willing to pay up to $1,500, Fraser would be willing to pay up to $1,600, and Kayden would pay no more than $1,000, what is the consumer surplus for this group of students who would like to live in the building? Explain how you calculated this consumer surplusarrow_forwardThink about all the goods and services that you consume. Which product gives you the highest consumer surplus? Discuss in detail using the equation of consumer surplusarrow_forward
- There are six potential consumers of computer games, each willing to buy only one game. Consumer 1 is willing to pay $40 for a computer game, consumer 2 is willing to pay $35, consumer 3 is willing to pay $30, consumer 4 is willing to pay $25, consumer 5 is willing to pay $20, and consumer 6 is willing to pay $15. Suppose the market price is $29. What is the total consumer surplus? The market price decreases to $19. What is the total consumer surplus now? When the price falls from $29 to $19, how much does each consumer’s individual consumer surplus change? How does total consumer surplus change?arrow_forwardConsider the market for packs of pens on campus, the demand for which is shown in the graph below. How much larger is consumer surplus when the price of pens is $1 instead of $3?.arrow_forwardOn a graph, consumer surplus is represented by the area a. between the demand and supply curves. b. below the demand curve and above price. c. below the price and above the supply curve. d. below the demand curve and to the right of equilibrium price.arrow_forward
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