Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 3, Problem 34RQ
What is the relationship between total surplus and economic efficiency?
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Chapter 3 Solutions
Principles of Economics 2e
Ch. 3 - Review Figure 3.4. Suppose the price of gasoline...Ch. 3 - Why do economists use the ceteris paribus...Ch. 3 - In an analysis of the market for paint, an...Ch. 3 - Many changes are affecting the market for oil....Ch. 3 - Lets think about the market for air travel. From...Ch. 3 - A tariff is a tax on imported goods. Suppose the...Ch. 3 - What is the effect of a price ceiling on the...Ch. 3 - Does a price ceiling change the equilibrium price?Ch. 3 - What would be the impact of imposing a price flour...Ch. 3 - Does a price ceiling increase the decrease the...
Ch. 3 - If a price floor benefits producers, why does a...Ch. 3 - What determines the level of prices in a market?Ch. 3 - What does a downward-sloping demand curve mean...Ch. 3 - Will demand curves have the same exact shape in...Ch. 3 - Will supply curves have the same shape in all...Ch. 3 - What is the relationship between quantity Demanded...Ch. 3 - How can you locate the equilibrium point on a...Ch. 3 - If the price is above line equilibrium level,...Ch. 3 - When the price is above the equilibrium, explain...Ch. 3 - What is the difference between the demand and the...Ch. 3 - What is the difference between the supply and the...Ch. 3 - When analyzing a market, how do economists deal...Ch. 3 - Name some factors that can cause a shift in line...Ch. 3 - Name some farm that can cause a shift in the...Ch. 3 - How does one analyze a market where both demand...Ch. 3 - What causes a movement along the demand curve?...Ch. 3 - Does a price ceiling attempt to make a price...Ch. 3 - How does a price ceiling set below the equilibrium...Ch. 3 - Does a price floor attempt to make a price higher...Ch. 3 - How does a price floor 521 above the equilibrium...Ch. 3 - What is consumer surplus? How is it illustrated on...Ch. 3 - What is producer surplus? How is it illustrated on...Ch. 3 - What is total surplus? How is it illustrated on a...Ch. 3 - What is the relationship between total surplus and...Ch. 3 - What is deadweight loss?Ch. 3 - Review Figure 3.4. Suppose the government decided...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Consider the demand for hamburgers. If the price...Ch. 3 - How do you suppose the demographics of an aging...Ch. 3 - We know that a change in the price of a product...Ch. 3 - Suppose there is a soda tax to curb obesity. What...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Suppose both of these events took place at the...Ch. 3 - Must government policy decisions have winners and...Ch. 3 - Agricultural price supports result in governments...Ch. 3 - Can you propose a policy that meld induce the...Ch. 3 - What term would an economist use to describe what...Ch. 3 - Explain why voluntary Martians improve social...Ch. 3 - Why would a free market mar operate at a quantity...Ch. 3 - Review Figure 3.4 again. Suppose the price of...Ch. 3 - Table 3.8 shows information on the demand and...Ch. 3 - The computer market in recent years has seen many...Ch. 3 - Table 3.9 illustrates the markets demand and...Ch. 3 - Table 3.10 shows the supply and demand for movie...Ch. 3 - A low-income county decides to set a price ceiling...
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- Why can total surplus never fall below zero in a market for goods and services?arrow_forwardCalculate the economic surplus in the market represented by the graph.arrow_forwardThe graph shows the demand and supply curves for sandwiches. If the sandwich market is efficient, what is the consumer surplus, what is the producer surplus, and what is the total surplus? If the market is efficient, the consumer surplus is $, the producer surplus is $, and total surplus is $ If the demand for sandwiches increases and the sandwich makers produce the efficient quantity, the consumer surplus, and the producer surplus O A. decreases; decreases OB. increases; increases OC. decreases; increases OD. increases; decreases 6- 5- 4- 3- 2- 1- Price (dollars per sandwich) S D 100 150 200 250 300 Quantity (sandwiches per hour) 350 C G Carrow_forward
- Use the following graph to answer the question: how much is producer surplus? What is the total value to consumers of consuming the first ten units of this good?arrow_forwardThe graph shows the supply curve of candles and the market price of a candle. What is the quantity of candles sold? Calculate the producer surplus, the total revenue from the candles, and the cost of producing them. *** Draw a point to show the quantity of candles sold and the price. Draw a shape that represents the producer surplus. The producer surplus is $ The total revenue is $. The total cost of producing 20 candles is $ 50.00 40.00- 30.00 20.00 10.00- 0.00+ 0 Price (dollars per candle) S Market price 40 60 20 Quantity (candles per day) >>> Draw only the objects specified in the question. 80 Qarrow_forwardThe graph shows the supply curve of smart watches and the market price of a smart watch. Draw the producer surplus from smart watches. Label it. What is producer surplus? Producer surplus is OA. equal to the value that the seller places on the good, summed over the quantity sold OB. received by a producer when price exceeds the marginal cost of production OC. the value of the good minus its marginal cost, summed over the quantity sold D. the marginal benefit received by a producer, summed over all the units sold 500+ 400- 300- 200- 100+ 0- Price (dollars per smart watch) S-MG 0 Market price 1 4 5 6 2 3 Quantity (millions of smart watches per year) >>> Draw only the objects specified in the question. Q 7arrow_forward
- Is The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. 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 headset) 400 300 320 200 240 200 160 120 BO 40 0 0 Demand Supply 75 400 525 600 676 750 150 225 300 375 QUANTITY (Millions of headsets) Total surplus in this market is $ million, Equilibrium A Consumer Surplus ◊ Producer Surplus Bas & Pant course 0xarrow_forwardSuppose the market price of sunflower changed to 5 (P = 5) from the market equilibrium (Question 10). 12. Use the percentage change in quantity and price to calculate the price elasticity of demand from this change 13. What is new consumer surplus and producer surplus? Who gets benefit from this price change? Briefly explain.arrow_forwardAnswer the following questions based on the graph that represents Kyle's demand for ribs per week at Big Ed's Barbecue. f. If the price of ribs rose to $10, what would happen to Big Ed's producer surplus? g. What is the total surplus in this market at a price of $10? h. If the price of ribs fell to $5, what would be Kyle's consumer surplus? j. What is the total surplus in this market at a price of $5?arrow_forward
- Determine the output level creates a maximum total surplus.arrow_forwardam. 57.arrow_forwardThe graph shows the supply curve of smart watches and the market price of a smart watch. Draw the producer surplus from smart watches. Label it. What is producer surplus? Producer surplus is OA. equal to the value that the seller places on the good, summed over the quantity sold OB. received by a producer when price exceeds the marginal cost of production OC. the value of the good minus its marginal cost, summed over the quantity sold O D. the marginal benefit received by a producer, summed over all the units sold 500- 400 300- 200- 100- Price (dollars per smart watch) 0- 0 S-MC H Market price Q 2 6 3 5 Quantity (millions of smart watches per year) >>> Draw only the objects specified in the question.arrow_forward
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