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

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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
Homework (Ch 07)
Consider the market for apartments. The market price of each apartment is $350,000, and each buyer demands no more than one apartment.
Suppose that Lorenzo is the only consumer in the apartment market. His willingness to pay for an apartment is $560,000. Based on Lorenzo's
willingness to pay, the following graph shows his demand curve apartments.
Shade the area representing Lorenzo's consumer surplus using the green rectangle (triangle symbols).
?
Lorenzo's Demand
560
490
Lorenzo's Consumer Surplus
420
Market Price
350
280
210
140
70
0
7°F
unny
PRICE (Thousands of dollars)
HH
Te
O O
^
Transcribed Image Text:Homework (Ch 07) Consider the market for apartments. The market price of each apartment is $350,000, and each buyer demands no more than one apartment. Suppose that Lorenzo is the only consumer in the apartment market. His willingness to pay for an apartment is $560,000. Based on Lorenzo's willingness to pay, the following graph shows his demand curve apartments. Shade the area representing Lorenzo's consumer surplus using the green rectangle (triangle symbols). ? Lorenzo's Demand 560 490 Lorenzo's Consumer Surplus 420 Market Price 350 280 210 140 70 0 7°F unny PRICE (Thousands of dollars) HH Te O O ^
=
ny
Based on Neha's and Lorenzo's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle
symbol). Next, shade Lorenzo's consumer surplus using the green rectangle (triangle symbols), and shade Neha's consumer surplus using the purple
rectangle (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.
560
490
Demand Curve
420
Market Price
350
Lorenzo's Consumer Surplus
280
Neha's Consumer Surplus
210
140
70
0
PRICE (Thousands of dollars)
0
1
3
QUANTITY (Apartments)
G
CI
C
50
F10
F11
F12
Fr
Transcribed Image Text:= ny Based on Neha's and Lorenzo's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Lorenzo's consumer surplus using the green rectangle (triangle symbols), and shade Neha's consumer surplus using the purple rectangle (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. 560 490 Demand Curve 420 Market Price 350 Lorenzo's Consumer Surplus 280 Neha's Consumer Surplus 210 140 70 0 PRICE (Thousands of dollars) 0 1 3 QUANTITY (Apartments) G CI C 50 F10 F11 F12 Fr
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