Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than oneelectric vehicle.Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake'swillingness to pay, the following graph shows his demand curve for electric vehicles.Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).PRICE (Thousands of dollars)400Jake's Demand35030025020015010050Market Price00345QUANTITY (Electric vehicles)Jake's Consumer SurplusNow, suppose another buyer, Latasha, enters the market for electric vehicles, and her willingness to pay is $250,000.Based on Latasha's and Jake's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circlesymbol). Next, shade Jake's consumer surplus using the green rectangle (triangle symbols), and shade Latasha's consumer surplus using the purplerectangle (diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.PRICE (Thousands of dollars)400350300Demand Curve250Jake's Consumer SurplusMarket Price200150Latasha's Consumer Surplus100500034QUANTITY (Electric vehicles)Suppose Nick is willing to pay a total of $150,000 for an electric vehicle.True or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Nick will not buy the electric vehicle because it would be worthless to him than its market price of $200,000.TrueO False

Consumer surplus is the difference between the cost they actually pay and the cost they are willing…

Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than one electric vehicle. Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake's willingness to pay, the following graph shows his demand curve for electric vehicles. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).

Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than one electric vehicle. Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake's willingness to pay, the following graph shows his demand curve for electric vehicles. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose Sam is willing to pay A total of 280,000 for an apartment. True or false: keep his maximum willingness to pay for an apartment in mind, Sam will buy the apparent because it would be worth more than marketplace of 350,000
Please refer to the following information to answer the question (in bold) below: You enjoy consuming apples (A) and oranges (O). Suppose that your utility function over both goods is given by Your marginal utility function for apples is . Your marginal utility function for oranges is U (A, O) = AO³ MUA = 0³ MUO 3A0² . Currently, the price of apples is $10/peck, the price of oranges is $5/pound, and your income is $160. Assume that apples are your horizontal axis good and oranges are your vertical axis good. = When you set up the optimal decision rule for your consumer problem, which of the following statements best describes how much you will buy of apples and oranges at your consumer equilibrium? For each peck of apples, you will buy 1/3 pounds of oranges. For each peck of apples, you will buy 1 pounds of oranges. O For each peck of apples, you will buy 3 pounds of oranges. O For each peck of apples, you will buy 6 pounds of oranges.
e E L E 11- esc CENGAGE MINDTAP Chapter 07 Homework Consider the market for electric vehicles. The market price of each electric vehicle is $340,000, and each consumer demands no more than one electric vehicle. Suppose that Antonio is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $595,000. Based on Antonio's willingness to pay, the following graph shows his demand curve for electric vehicles. PRICE (Thousands of dollars) Shade the area representing Antonio's consumer surplus using the green rectangle (triangle symbols). 680 595 1 ! 510 425 3:0 255 170 85 0 :0² FI Q A N Antonio's Demand Now, suppose another buyer, Caroline, enters the market for electric vehicles, and her willingness to pay is $425,000. @ 2 GO 2 QUANTITY (Electric vehicles) F2 W S 3 #3 80 F3 E Market Price D $ 4 X C 888 F4 R F Antonio's Consumer Surplus % 5 ng.cengage.com FS T V 6 MacBook Air G (?) F6 Y B & 7 H F7 U N * 8 J DII 1 ( 9 M K ) 0 0 F10 L P Q 90 AB
Consider the market for CD players, illustrated in the figure to the right. Suppose there are network externalities in this market such that the quantity of a good demanded grows in response to the growth of purchases by other individuals (as indicated by the demand curve "Demand" in the figure). Suppose that the price is initially $90 where the quantity demanded is 120 (thousand CD players per month). If the price of CD players falls to $50, demand will increase to 180 thousand CD players per month. (Enter your response using an integer.) Of this increase, price effect and thousand units of the 60 thousand-unit increase is the pure thousand units of the increase is the bandwagon effect. C Price 200- 180- 160- 140- 120+ 100- 80- 60- 40- 20- 0+ 0 Doo Demand 20 P150 D60 P120 180 40 60 80 100 120 140 160 180 200 220 CD Players (thousands per month)
4. Aaron and Burris have the following utility functions over two goods, x and y. Aaron’s utility function: UA(xA, yA) = min{xA/3, yA} Burris’s utility function: UB(xB, yB) = 9xB + 3yB Aaron’s endowment is eA = (2, 4). Burris’ endowment is eB = (10, 8). In an Edgeworth Box diagram, show which allocations are in the core. Solve for the set of Pareto optimal allocations (i.e. the contract curve) in the Edgeworth Box. Illustrate the contract curve in an Edgeworth Box diagram. Let good y be the numeraire (i.e. set py = 1 and let px = p). Solve for the Walrasian competitive equilibrium allocation and price ratio.
Joe mows lawns in his neighborhood for extra money. Suppose the demand for lawn mowing in Joe's neighborhood is: QD = 46 - 2P and that the supply of lawn mowing (Joe's willingness to mow lawns) is: Qs = 14 + P. The market-clearing price of lawn mowing is $ 20 per lawn and the market-clearing quantity is 6 lawns. (Enter your responses rounded to two decimal places.) The corresponding consumer surplus is $
Marvin has a Cobb-Douglas utility function, 0.5 0.5 U= 91 92 his income is Y = $900, and initially he faces prices of p₁ = $1 and p2 = $4. If p₁ increases from $1 to $2, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's change in consumer surplus (ACS) is $ minus sign if necessary.) Marvin's compensating variation (CV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.) (Enter your response rounded to two decimal places and include a Marvin's equivalent variation (EV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.)
George Michael sells frozen bananas to his uncles Buster and Gob, who are his only customers and who live off of a $15 allowance (each) from their mother Lucille. Buster’s demand function is D(p, m) = 25 − 2p + m 3 and Gob’s demand function is D(p, m) = 15 − p + m 5 . One day the freezer breaks. What is the highest price George Michael can charge his uncles if he wants to unload his entire inventory of 42 frozen bananas?
You have been asked to analyze what will happen to the New England market for electricity if the Winter 2022-23 (December 2022 through February 2023) results in much colder temperatures than Winter 2021-22 (December 2021 through February 2022), causing all residential customers to scramble for more electricity than they would typically need to heat their homes. Using your graph from Question 2, analyze the impact of this change in consumer desire for more electricity. Clearly show any shifts in demand and/or supply curve(s) that came about because of this exit. Label any shifted curves as D2 and/or S2. Clearly show the new market equilibrium. Label the new equilibrium price as P2 and equilibrium quantity transacted as Q2
Since 1979, low-income recipients have been given food stamps without charge. However, before 1979, people bought food stamps at a subsidized rate. For example, to get $1 worth of food stamps, a household paid about 40¢ (the exact amount varied by household characteristics and other factors). What is the budget constraint facing an individual if that individual may buy up to $100 per month in food stamps at 40¢ per each $1 coupon? Compare this constraint to the original budget constraint with no assistance and the budget constraint if the individual receives $100 of food stamps for free. Assume the individual has income of $120 per month. 1.) Using the multipoint curved line drawing tool, graph the budget constraint facing this food stamp recipient with subsidized food stamps. Label this line 'L₁'. 2.) Using the line drawing tool, graph the budget constraint with no food stamp assistance. Label this line 'L2.' 3.) Using the multipoint curved line drawing tool, graph the budget…
Elsie sells homemade lemonade. If she prices a glass of lemonade at $3, she sells 12 glasses a day. If she gives a $0.50 discount (per glass), she can sell 3 more glasses per day. Write a linear demand equation q = mp + b, where p is the price per glass, and q is the number of glasses she can sell per day. Suppose that it costs her 20 cents a glass to make lemonade. There is no fixed cost. Write down the revenue function, cost function, and profit function as functions of p. How much should she charge per glass to maximize her profit? What is the maximum profit?
Dean likes to practice guitar in his apartment, working primarily on mastering old Velvet Underground songs. Because he’s sure that developing guitar prowess will lead to riches – or at least critical acclaim in indie circles – he derives $500 in surplus from being able to practice. Dean’s practicing, however, is quite loud and can be heard clearly through paper-thin walls in his hip Brooklyn apartment. Britta lives next door and likes to read, but she is unable to do so when Dean plays guitar. She gets $350 in surplus from the satisfaction of reading. Suppose that when Dean and Britta bargain, they always split any surplus to be divided evenly. Assume that it’s common knowledge that courts always overestimate damages by $200, and transaction costs are $50. Given these assumptions, which of the following legal rules is most efficient: Assuming the same information from Question 28 above, what would be the most efficient tax to levy on Dean’s playing? A. $200 B.…