Suppose an individual demand curve is given by P = 50 - 5Q, where P is the price of pizza and Q is the quantity she consumes. Assuming her income per week is $500 and the current price of pizza is $10 each, by how much will her consumer surplus decline if the price of pizza increased to $15 each?

Suppose an individual demand curve is given by P = 50 - 5Q, where P is the price of pizza and Q is the quantity she consumes. Assuming her income per week is $500 and the current price of pizza is $10 each, by how much will her consumer surplus decline if the price of pizza increased to $15 each?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 17P: If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded...

See similar textbooks

Similar questions

As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.
What is the rule relating the ratio of marginal utility to prices of two goods at the optimal choice? Explain why, if this rule does not hold, the choice cannot be utility-maximizing
If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
Rasheed's utility function for goods X and Y is U(XY) 2XYY Let Py and Py be the prices for goods X and Y, and let I be Rasheed's income. Rasheed's demand equations for X and Y are: O A 21+Py 21+Px and Y X 4PX 4Pr O B. 21-Px 21 Px X 4P and Y 4P O C. 21-Px 21 Px and Y X= 4Px 4PY O D. X= and Y 2P Y 'X
Which of the following explains why a decrease in the price of a normal good will lead to an increase in the quantity demanded of the good? O A lower price decreases demand for complementary goods O A lower price increases consumers' marginal utility O A lower price increases demand for the good O A lower price increases demand for substitute goods O A lower price increases consumers' purchasing power
QUESTION 8 The demand for bicycles decreases by 10 as a result of an increase in the price of bicycles. The substitution effect alone would predict a decrease of 12 units. We can conclude that O a. Bicycles are a Giffen good O b. Bicycles are inferior goods OG Bicycles have a positive elasticity of demand with respect to income O d. Substitution and income effects have the same magnitude O e. None of the proposed answers is correct
Explain the difference between a positive and a negative network externality. A network externality for a good is positive if O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network extemality is negative if consumption by others increases a typical consumer's marginal utility from the good. c. the price is lower the more people own it, but a network externality is negative if the price is lower the fewer people own it. D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. O E. it has a complement, but a network effect is negative if it has a substitute. Give an example of each. An example of a positive network externality is the dermand for A. a work of…
Consider a situation with two goods. Which of the following statements are true, which are false? If a good is a Giffen good, then it is an inferior good. O True O False A good is a Giffen good if the demand for this good decreases O True False when income increases. A good is an inferior good if the demand for this good increases when its price increases. O True False
If two goods are substitutes, then O an increase in the price of one causes the demand for the other to fall. O there is an inverse relationship between changes in the price of one good and changes in the demand for the other. O if the price of one good falls, the demand for the other good falls also. O changes in the quantity demanded of one good will not affect the demand for the other.
Assume that a consumer consumes two diff erent goods, and the utility function is u(x)= u (x1, x2) = x1x2, the production function of t wo goods is y=1/2+(x-5/8)1/3 at first, then t he function of goods 1 changes to y=1/2+(x -325/8)1/3. Assume that her income is M = 1 8. Calculate the compensating variation and equivalent variation. A B EV-15-6√3 CV=16√3-15 C CV=16√3-15 EV-15-6√3 D EV 18√3-18 CV-18-6√3 EV-18-6√3 CV-18√3-18
For normal goodsA) the substitution effect of a price decrease will decrease the quantity of the good demanded while theincome effect of a price decrease will increase the quantity of the good demanded.B) the substitution and income effects of a price decrease will both increase the quantity of the gooddemanded.C) the substitution and income effects of a price decrease will both decrease the quantity of the gooddemanded.D) the substitution effect of a price decrease will increase the quantity of the good demanded while theincome effect of a price decrease will decrease the quantity of the good demanded.
Peter har this utility function リ=x,° 0,5 0,5 メー Where U is utility and x, and x, and the volume of goods 1 og 2 Peters income can be expressed as m, while the price on the goods 1 and 2 is given by p, and p, When the price on good 1 is 2 dollar, and the price on good 2 is 1 dollars. Peter has a budgett of 200 dollars. Peter will buy XXX of good 1, and XXX of good 2 Calculate XXX and XXX