Joe's demand for spring water can be represented as p- 15 - 0.8Q (where p is measured in $/ gallon and Q is measured in gallons). He recently discovered a spring where water can be obtained free of charge. His consumer surplus from this water is Your Answer: Answer

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Joe's demand for spring water can be represented as p = 15 - 0.8Q (where p is
measured in $/ gallon and Q is measured in gallons). He recently discovered a spring
where water can be obtained free of charge. His consumer surplus from this water is
Your Answer:
Answer
Transcribed Image Text:Joe's demand for spring water can be represented as p = 15 - 0.8Q (where p is measured in $/ gallon and Q is measured in gallons). He recently discovered a spring where water can be obtained free of charge. His consumer surplus from this water is Your Answer: Answer
Sarah and David both have linear demand curves for lemonade. Sarah's demand is
more elastic than David's. At the current price of $0.50 per glass, they both choose
to buy 5 glasses. A change in the price of lemonade to $0.75 per glass will
decrease Sarah's consumer surplus more than David's.
increase Sarah's consumer surplus more than David's.
increase David's consumer surplus more than Sarah's.
decrease David's consumer surplus more than Sarah's.
Transcribed Image Text:Sarah and David both have linear demand curves for lemonade. Sarah's demand is more elastic than David's. At the current price of $0.50 per glass, they both choose to buy 5 glasses. A change in the price of lemonade to $0.75 per glass will decrease Sarah's consumer surplus more than David's. increase Sarah's consumer surplus more than David's. increase David's consumer surplus more than Sarah's. decrease David's consumer surplus more than Sarah's.
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