EBK MACROECONOMICS
7th Edition
ISBN: 9780134738970
Author: O'Brien
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Question
Chapter 4, Problem 4.1.5PA
To determine
The amount of
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Check out a sample textbook solutionStudents have asked these similar questions
A “Spider-man" DVD is worth $30 to Marcus. But
he buys one on sale for just $15. What is the
consumer surplus that results from Marcus's
purchase?
$10
$25
$15 Incorrect
cannot be determined from the information given
Incorrect.
$40
Consumer surplus is a measure of the difference between:
a) The price which a consumer has to pay and the cost of producing the good (in a diagram, the area between the market price, and the supply curve).
b) The consumer’s willingness to pay, and the cost of production (the area between the demand curve and the supply curve).
c) The value which a consumer places on a unit of the good, and the market price (the area between the demand curve and the market price line).
d) The marginal revenue from sales and the marginal cost of sales (the area between the marginal revenue and the marginal cost curves).
The market supply and demand for a product are shown in the diagram below.
Is the price elasticity of supply less than one, equal to one, or greater than one? Explain.
Calculate consumer surplus at the equilibrium price. Show your work.
Now suppose the government imposes a per-unit tax of $1 on producers.
What happens to total revenue received by producers after they pay the tax to the government? Explain.
Will producer surplus increase, decrease, or stay the same?
Will total surplus increase, decrease, or stay the same? Explain.
Chapter 4 Solutions
EBK MACROECONOMICS
Ch. 4.A - Prob. 1RQCh. 4.A - Prob. 2RQCh. 4.A - Prob. 3RQCh. 4.A - Why would economists use the term deadweight loss...Ch. 4.A - Prob. 5PACh. 4.A - Prob. 6PACh. 4.A - Prob. 7PACh. 4.A - Prob. 8PACh. 4.A - Prob. 9PACh. 4 - Prob. 1TC
Ch. 4 - Prob. 2TCCh. 4 - Prob. 4.1.1RQCh. 4 - Prob. 4.1.2RQCh. 4 - Prob. 4.1.3RQCh. 4 - Prob. 4.1.4RQCh. 4 - Prob. 4.1.5PACh. 4 - Prob. 4.1.6PACh. 4 - Prob. 4.1.7PACh. 4 - Prob. 4.1.8PACh. 4 - Prob. 4.1.9PACh. 4 - Prob. 4.1.10PACh. 4 - Prob. 4.1.11PACh. 4 - Prob. 4.1.12PACh. 4 - Prob. 4.1.13PACh. 4 - Prob. 4.1.14PACh. 4 - Prob. 4.2.1RQCh. 4 - What is economic efficiency? Why do economists...Ch. 4 - Prob. 4.2.3PACh. 4 - Prob. 4.2.4PACh. 4 - Prob. 4.2.5PACh. 4 - Prob. 4.2.6PACh. 4 - Prob. 4.2.7PACh. 4 - Prob. 4.2.8PACh. 4 - Prob. 4.2.9PACh. 4 - Prob. 4.2.10PACh. 4 - Prob. 4.3.1RQCh. 4 - Prob. 4.3.2RQCh. 4 - Prob. 4.3.3RQCh. 4 - Prob. 4.3.4RQCh. 4 - Prob. 4.3.5PACh. 4 - Prob. 4.3.6PACh. 4 - Prob. 4.3.7PACh. 4 - Prob. 4.3.8PACh. 4 - Prob. 4.3.9PACh. 4 - Prob. 4.3.10PACh. 4 - Prob. 4.3.11PACh. 4 - Prob. 4.3.12PACh. 4 - Prob. 4.3.13PACh. 4 - Prob. 4.3.14PACh. 4 - Prob. 4.3.15PACh. 4 - Prob. 4.3.16PACh. 4 - Prob. 4.3.17PACh. 4 - Prob. 4.3.18PACh. 4 - Prob. 4.3.19PACh. 4 - Prob. 4.4.1RQCh. 4 - Prob. 4.4.2RQCh. 4 - Prob. 4.4.3RQCh. 4 - Prob. 4.4.4RQCh. 4 - Prob. 4.4.5PACh. 4 - Prob. 4.4.6PACh. 4 - Prob. 4.4.7PACh. 4 - Prob. 4.4.8PACh. 4 - Prob. 4.4.9PACh. 4 - Prob. 4.4.10PACh. 4 - Prob. 4.2CTE
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- 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_forwardWhich of the following would lead to the creation of some consumer surplus? Sam refuses to pay $10 for a haircut because it is only worth $8 to him. Fred buys a car for $4000, the maximum amount that he is willing to pay. Danette pays $30 a month for phone service, but it is worth $70 a month to her. When Florence purchases a candy bar for 50 cents, she uses a $20 bill to pay for it.arrow_forwardThe consumer surplus for John is $10 and his maximum willingness to pay for the product is $30 What would have been the market price?arrow_forward
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