The following graph shows Alyssa's weekly demand for pizza, represented by the blue line. Point A represents a point along her weekly demand curve.The market price of pizza is $3.00 per slice, as shown by the horizontal black line.Alyssa's Weekly Demand7.506.756.005.25Demand4.50А3.75Price3.002.251.500.7546 810121618QUANTITY (Slices of pizza)for her 8th slice of pizza each week. Because she has to pay only $3.00From the previous graph, you can tell that Alyssa is willing to pay $per slice, the consumer surplus she gains from the 8th slice of pizza is $2014PRICE (Dollars per slice) Suppose the price of pizza were to fall to $2.25 per slice. At this lower price, Alyssa would receive a consumer surplus of $from the 8thslice of pizza she buys.The following graph shows the weekly market demand for pizza in a small economy.Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of pizza is $3.00 per slice. Then, use thegreen point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $2.25 per slice.Small Economy's Weekly Demand7.506.756.00Initial Consumer Surplus (P = $3.00)5.25DemandA4.50Additional Consumer Surplus (P = $2.25)3.75P $3.003.002.25P = $2.251.500.7520406080100120140160180200QUANTITY (Thousands of slices of pizza)PRICE (Dollars per slice)

Point A on the given consumer's demand curve in figure (1) below depicts the maximum price that the…

for her 8th slice of pizza each week. Because she has to pay only $3.00 From the previous graph, you can tell that Alyssa is willing to pay $ per slice, the consumer surplus she gains from the 8th slice of pizza is $

for her 8th slice of pizza each week. Because she has to pay only $3.00 From the previous graph, you can tell that Alyssa is willing to pay $ per slice, the consumer surplus she gains from the 8th slice of pizza is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
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