Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 7, Problem 2P
To determine
(a)
The amount S would be willing to pay for one bag of potato chips.
To determine
(b)
The amount S would be willing to pay for second bag of potato chips.
To determine
(c)
The
To determine
(d)
The total
Expert Solution & Answer
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Students have asked these similar questions
A) If the price of a canister of maple syrup is $35, how many canisters will Joe Mapleworth purchase & what is Joe Mapleworth's consumer surplus at $35?
B) If the price of a canister of maple syrup drops to $25, how many canisters will Joe Mapleworth purchase & what is Joe Mapleworth's consumer surplus at $25?
C) If the price of a canister of maple syrup drops to $15, how many canisters will Joe Mapleworth purchase & what is Joe Mapleworth's consumer surplus at $15?
It is a hot day and Bert is thirsty. Here is the value he places on a bottle of water:
Bottle of Water
Value
Value of first bottle
$7
Value of second bottle
$5
Value of third bottle
$3
Value of fourth bottle
$1
From this information, derive Bert’s demand schedule.
Graph his demand curve for bottled water.
If the price of a bottle of water is $4, how many bottles does Bert buy? How much consumer surplus does Bert get from his purchases? Show Bert’s consumer surplus in your graph.
If the price falls to $2, how does quantity demand change? How does Bert’s consumer surplus change? Show these changes in 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.
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Similar questions
- Matthew and Victoria are shopping for a new pair of running shoes. Victoria is willing to pay $200 and Matthew is willing to pay $110 for a new pair of shoes. What is the total gain in surplus when the price of then shoes decreases from $160 to $100?arrow_forwardSuppose a consumer is willing to buy a book for $50, but the actual price of the book in the market is $30. What is the consumer surplus in this case? If the price of the book increases to $40, what would be the new consumer surplus?arrow_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_forwardLarry purchases a book for $10, and his consumer surplus is $3. How much is Larry willing to pay for the book?arrow_forwardJanice 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 _______.arrow_forward
- Chin purchases five protein bars at a price of $3 each. The marginal benefit he receives from each bar is $5 for the first bar, $4.50 for the second bar, $4 for the third bar, $3.50 for the fourth bar, and $3 for the fifth bar. The marginal cost of producing the bars is $2 each. What is Chin's consumer surplus on the fifth bar?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
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