The producer surplus in a market equals a- the value the consumers receive from the good minus the producers' opportunity cost of providing it b - the producers’ opportunity cost of providing the good minus the amount they receive from selling it c- the amount the producers receive from selling the good d- the amount the producers receive from selling the good minus their opportunity cost of providing it

The producer surplus in a market equals a- the value the consumers receive from the good minus the producers' opportunity cost of providing it b - the producers’ opportunity cost of providing the good minus the amount they receive from selling it c- the amount the producers receive from selling the good d- the amount the producers receive from selling the good minus their opportunity cost of providing it

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 5CQQ

See similar textbooks

Similar questions

1. What is meant by producer surplus? a It is the difference between a producer's minimum selling price and the actual price. b It is the total quantity of a good produced by the seller. c It is the difference between the producer's marginal cost and the price. d It is a measure of the total benefit to producers resulting from the purchase of an input.
3. Demand and supply of cigarettes in California are: Supply: Qs = 2Ps + 20 Demand: QD = 200 – PD Calculate the market equilibrium price and quantity, assuming perfect competition. a. b. California decides to tax on cigarettes to fund preschool. It recognizes that a secondary benefit of the tax would be to reduce teen smoking. Suppose taxes of $15 per carton are placed on the consumption of cigarettes. By how much will the tax increase the price consumers pay? By how much will it decrease the price producers receive?
What is meant by consumer surplus? a It is the total quantity of a good bought by a consumer divided by the price paid. b It is a measure of an individual consumer's utility from the consumption of a good. c It is the difference between a consumer's maximum willingness to pay and the price. d It is a measure of the total benefit to consumers from the purchase of a good.
8. Consumer and Producer Surplus Suppose Charles is the only seller in the market for bottled water and Yakov is the only buyer. The following lists show the value Yakov places on a bottle of water and the cost Charles incurs to produce each bottle of water: Yakov's Value Value of first bottle: $7 Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1 Charles's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7 The following table shows their respective supply and demand schedules: Price Quantity Demanded Quantity Supplied $1 or less 4 о $1 to $3 3 1 $3 to $5 2 2 $5 to $7 1 3 More than $7 0 4 Use Charles's supply schedule and Yakov's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table. Price Quantity Demanded Quantity Supplied 2 4 A price of brings supply and demand into equilibrium. At the equilibrium price, consumer…
4. The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name “Y. ”Good Y is an inferior good. Is good Y a lower-quality product than good X ? * a. Yes b. No 5. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if the price of input A increases. * a. Increase b. Decrease c. None of the above 6. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if an excise tax of P 1 is imposed on good X . * a. Increase b. Decrease c. None of the above
1. Measuring Consumer Surplus Suppose the market demand for donuts was the following: P donuts $5 $1.50- 75 Qdon donuts a. Calculate the Consumer Surplus earned in the market when the price is $1.50 b. What happens to consumer surplus if the price drops?
7. Total economic surplus The following diagram shows supply and demand in the market for laptops. Use the black point (plus symbol) to indicate the equilibrium price and quantity of laptops. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. PRICE (Dollars per laptop) 250 225 200 175 150 125 100 75 50 25 0 0 Demand Supply 35 70 105 140 175 210 245 280 315 350 QUANTITY (Millions of laptops) Total surplus in this market is $ million. + Equilibrium A Consumer Surplus Producer Surplus (?)
a. Draw a supply-demand graph in the market for milk. Indicate equilibrium price and equilibrium quantity. b) in the same graph, indicate a price at which there is a surplus of milk. Show the surplus of milk in your graph.
8. Suppose a technological advance reduces the cost of making computers. a. Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and pro- ducer surplus in the market for computers. b. Computers and adding machines are substitutes. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for adding machines. Should adding machine producers be happy or sad about the technological advance in computers? c. Computers and software are complements. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for software. Should software producers be happy or sad about the technological advance in computers? d. Does this analysis help explain why software pro- ducer Bill Gates is one of the world's richest men?
surplus is the difference between the maximum price a consumer is (or consumers are) willing to pay for a product and the actual [market] price. A. Producer B. Consumer C. None
If the demand curve for chocolate bars is downward sloping and the supply of it decreases, there is __ in consumer surplus; a. an increase, b. no change, c. it's impossible to tell what will happen to consumer surplus, d. a decrease
Please