Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 11RQ
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To find:
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You are the benevolent social planner for your city. several small foods businesses approach you, stating that they plan to increase their prices to compete with national food establishments. as a benevolent social planner, would you advise them to raise their prices or not? explain your answer using concepts in producer and consumer surplus?
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Use the graph below to answer this question:
Based on this graph, suppose the equilibrium price and quantity remain the same but the demand
curve becomes steeper (more inelastic demand). What will that do to the consumer or producer
surplus?
$16
$12
6
It will increase the consumer surplus.
It will reduce the producer surplus.
O It will reduce the consumer surplus.
O It will leave both surpluses unchanged.
O It will increase the producer surplus.
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Approximately how much consumer surplus does Wikipedia generate per person in the United States each year?
Multiple Choice $17,000 $260 $576 $150
Chapter 5 Solutions
Microeconomics
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQ
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 5PACh. 5 - Prob. 6PACh. 5 - Prob. 7PACh. 5 - Prob. 8PACh. 5 - Prob. 10PACh. 5 - Prob. 11PACh. 5 - Prob. 12PACh. 5 - Prob. 13PACh. 5 - Prob. 14PACh. 5 - Prob. 15PACh. 5 - Prob. 16PACh. 5 - Prob. 17PACh. 5 - Prob. 18PACh. 5 - Prob. 19PACh. 5 - Prob. 20PACh. 5 - Prob. 21PACh. 5 - Prob. 22PACh. 5 - Prob. 23PACh. 5 - Prob. 24PACh. 5 - Prob. 25PA
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- Suppose that the market for cigarettes is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as P = 60 - Qd; the supply curve can be expressed as P = 0.5Qs. Quantity is expressed in millions of boxes per month. Now suppose that the federal government imposes a production quota on cigarettes of 30 million boxes per month. What is the change in producer surplus (per million boxes) associated with the quota? $175 $75 $25 $50arrow_forward18-19. In the competitive market for white sugar, consumer demand is given by P=100-0.050 and suppliers' behaviour is represented by the supply curve of P=1+0.005Q, where P is measured in dollars and Q is measured in kilos per month. Questions 17 through 19 refer to this market. 18. Imagine now that the government imposes a price ceiling of $5.00 per kilo on sugar, and that the ceiling is obeyed by all market participants. In the resulting equilibrium the total number of kilos of sugar exchanged in the market is equal to: A) 2100 G) 800 B) 2000 H) 600 A) $5 G) $70 C) 1900 I) 400 B) $10 H) $80 19. Suppose suppliers obey the price ceiling but consumers sell sugar on a black market. What will the black market price for sugar be? D) 1400 E) 1200 J) None of the above C) $10.50 I) $21 E) $50 F) 1000 D) $40 J) None of the above F) $60arrow_forwardIf the daily demand curve for gasoline is as provided in the following graph, then how much consumer surplus would consumers receive if the market price for gasoline was $1.60 per litre? What about for a price of $1.20 per litre? Price ($ per litre) $3.00 $1.60 $1.20 040 120 200 280 Demand 360 440 Quantity of gasoline (millions of litres)arrow_forward
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