EBK ECONOMICS: PRINCIPLES AND POLICY
EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9781305465626
Author: Blinder
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 5, Problem 7TY
To determine

Illustration of demand curves of Person JA, Person JI, and show the market demand curve.

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The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $80. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Larry, green (triangle symbols) for Megan, purple (diamond symbols) for Raphael, tan (dash symbols) for Susan, and blue (circle symbols) for Alex. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $80. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $120.   Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and blue (circle symbols) for Carlos. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $120. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)   Based on the information on the previous graph, you can tell that____will buy tablets at the given market price, and total consumer surplus in this market will be___   Suppose the market price of a tablet decreases…
Economist George Stigler once wrote that, according to consumer theory, “if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises.” What kind of commodity was Stigler referring to? A normal good An inferior good When the price of this commodity rises, the substitution effect is  (positive / negative) and the income effect is (positive / negative). So the net result for consumption of this commodity  (depends on which effect dominates / is a decrease / is an increase).
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