(a) Reason why higher price increases consumer surplus . (b) Paying for inspection of car. Concept Introduction: Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer. Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good. Producer surplus : Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

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Answer 1

Question

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

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Answer 2

Question

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

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Answer 3

Question

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

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Answer 4

Question

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

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Answer 5

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

Answer 6

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

Answer 7

Chapter 4, Problem 4P

To determine

(a) Reason why higher price increases consumer surplus.
(b) Paying for inspection of car.

Concept Introduction:

Potential buyer: When a person is interested in the proposal of the seller, then that person is called as a potential buyer.

Consumer surplus: The difference in amounts that consumers are ready to pay for a particular good and service and the total amount they actually pay for that good is known as consumer surplus. The amount saved as surplus can be used to buy some other good.

Producer surplus: Producer surplus is the benefit that a producer receives by selling the good in the market. It is the difference between the amount a producer of a good receives and the lowest amount the producer is willing to accept for the good. Greater the difference between the two prices, the greater benefit of the producer.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 4 - Prob. 1BCQ Ch. 4 - Prob. 2BCQ Ch. 4 - Prob. 1P Ch. 4 - Prob. 2P Ch. 4 - Prob. 3P Ch. 4 - Prob. 4P Ch. 4 - Prob. 5P Ch. 4 - Prob. 6P Ch. 4 - Prob. 7P Ch. 4 - Prob. 8P

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Chapter 4 Solutions