It is a hot day, and Bert is thirsty. Here is the value he places on each bottle of water: Value of first bottle $7 Value of second bottle $5 Value of third bottle $3 Value of fourth bottle $1 a. From this information, derive Bert ' s demand schedule. Graph his demand curve for bottled water. b. 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. c. If the price falls to $2, how does quantity demanded change? How does Bert ' s consumer surplus change? Show these changes in your graph.

BuyFind

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050
BuyFind

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050

Solutions

Chapter
Section
Chapter 7, Problem 4PA
Textbook Problem

It is a hot day, and Bert is thirsty. Here is the value he places on each bottle of water:

Value of first bottle    $7

Value of second bottle    $5

Value of third bottle    $3

Value of fourth bottle    $1

a. From this information, derive Bert's demand schedule. Graph his demand curve for bottled water.

b. 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.

c. If the price falls to $2, how does quantity demanded change? How does Bert's consumer surplus change? Show these changes in your graph.

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Chapter 7 Solutions

Principles of Microeconomics

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