To answer: The amount of consumer surplus generated in each of the following situations. Leon goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. When he is paying for it, he learned that the T-shirt has been discounted by 50%. Alberto goes to the music store hoping to find a used copy of Nirvana’s Never mind for up to $30. The store has one copy of the record selling for $30, which he purchases. After soccer practice, Stacey is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 per bottle, so she declines to purchase it. Concept Introduction: Consumer Surplus: It is defined as the difference between consumer’s willingness to pay and how much does a consumer pay for the goods and services. It is the area above the price level and below the demand curve. Producer Surplus : It is defined as the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good. It is the area below the price level and above the supply curve.

Question

Explain and evaluate the impact of legislation on the U.S. criminal justice system, specifically on the prison population and its impact on poverty and the U.S. economy. Include significant elements and limitations such as the War on Drugs and the First Step Act.

Answer 1

Question

Chapter 4, Problem 1P

To determine

To answer:

The amount of consumer surplus generated in each of the following situations.

Leon goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. When he is paying for it, he learned that the T-shirt has been discounted by 50%.

Alberto goes to the music store hoping to find a used copy of Nirvana’s Never mind for up to $30. The store has one copy of the record selling for $30, which he purchases.

After soccer practice, Stacey is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 per bottle, so she declines to purchase it.

Concept Introduction:

Consumer Surplus:

It is defined as the difference between consumer’s willingness to pay and how much does a consumer pay for the goods and services. It is the area above the price level and below the demand curve.

Producer Surplus:

It is defined as the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good. It is the area below the price level and above the supply curve.

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