Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 6, Problem 10P
To determine
The way we can say that a rider has derived his
Consumer surplus:
It is the difference between the
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3. Consumer surplus for a group of consumers
The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for smartphones. The market price of a smartphone is shown by the black horizontal line at $120.
Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Kevin, green (triangle symbols) for Maria, purple (diamond symbols) for Rajiv, tan (dash symbols) for Simone, and blue (circle symbols) for Yakov. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at a market price of $120. (Note: If a person will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
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- 3. Consumer surplus for a group of consumers The following graph plots the demand curve (blue line) for several consumers in the market for bluetooth speakers in Mead, a small town located in Colorado. The Mead market price of a bluetooth speaker is given by the horizontal black line at $35. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Dmitri, green (triangle symbols) for Frances, purple (diamond symbols) for Jake, tan (dash symbols) for Latasha, and blue (circle symbols) for Nick. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a bluetooth speaker at a market price of $35. (Note: If a person will not purchase a bluetooth speaker at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) PRICE (Dollars per bluetooth speaker) 5 80 S 70 60 50 40 30 20 5 10 0 0 1 Dmitri 2 Frances 3…arrow_forward3. Consumer surplus for a group of consumers The following graph plots the demand curve (blue line) for several consumers in the market for motor scooters in Meade, a small town located in Kansas. The Meade market price of a motor scooter is given by the horizontal black line at $80. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Dmitri, green (triangle symbols) for Frances, purple (diamond symbols) for Jake, tan (dash symbols) for Latasha, and blue (circle symbols) for Nick. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a motor scooter at a market price of $80. (Note: If a person will not purchase a motor scooter at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) PRICE (Dollars per motor scooter) 160 140 120 Dmitri Frances Jake 100 80 60 40 20 Dmitri Frances Market Price…arrow_forward(Figure: Market for Grapefruits 1) Consider the market for grapefruit. At a market price of $4, what is total consumer surplus? Price ($/bag | of grapefruit) $10- $320 $160 $80 $120 8 6 4 2 0 20 40 60 80 100 Quantity of grapefruits (bags)arrow_forward
- Indicate the answer choice that best completes the statement or answers the question. 1. (Figure: Demand for jazz shows) The graph shows Jayden's monthly demand curve for live music at a small, local venue. Price per show ($) $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Quantity of shows If Jayden currently attends six shows per month, what is probably TRUE? a. The price of a concert ticket is between $9 and $12. b. Jayden does not have enough income to go to more than six shows per month. c. Each concert provides Jayden with the same marginal benefit. d. If the price rose to $18, Jayden would not attend any concerts. Page 1arrow_forward1. (a) Which causes a shortage of a good--- a price ceiling or a price floor? Justify your answer with a graph. (b) What is a budget constraint? A consumer has an income of $3000. Soda costs $3 per liter and cheese costs $6 per pound. Draw the consumer's budget constraint with soda on the vertical axis. What is the slope of this budget constraint?arrow_forward2. In most cases, a demand curve has a shape that we call "downward sloping". This means that it looks like a diagonal line going from the top left to the bottom right of a market graph. Why does demand usually have this shape? Explain in your own words. Make sure to include the concept of marginal benefit (a.k.a. marginal utility) in your explanation.arrow_forward
- 14. The pricing system Consider the market for hamburgers in an economy where the market equilibrium is characterized by a quantity of hamburgers of 50 million and a price of $5.00 per hamburger. Suppose that currently 80 million hamburgers are being produced and sold at a price of $2.50. This outcome in the market for hamburgers is economically because: The opportunity cost of producing the last hamburger equals the marginal benefit of consumption. Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers. Which of the following must be true for a market to be able to achieve an efficient outcome? Check all that apply. Firms can freely enter or exit the market without any barriers. A ceral planner allocates limited resources according to the needs of the people. Private property rights are well-defined and enforced. Evaluate the following statement. True or False: The pricing system ensures that even the lowest-valued…arrow_forwardshift in demand or supply Suppose the price of muffins decreases. (Assume that people regard donuts and muffins as substitutes) What way would a supply curve shift to the left or to the right? what way would a demand curve shift to the left or to the right? If donuts are a normal good, this will cause the demand for donuts to either increase or decrease?arrow_forwardQuestion attachedarrow_forward
- 6. Suppose that demand and supply of apples are described by the following equations: P = 100 - 3Q (demand) P = 20 + Q (supply) a) Calculate the equilibrium price and quantity. Illustrate. b) Suppose a $4 tax is placed on apples. What is the new equilibrium quantity? How much do consumers pay to get this quantity? How much do suppliers receive for selling this quantity? Show your results on a supply & demand diagram.arrow_forward17)Which of the following is (are) consistent with the law of demand? * a)Both (b) and (c) above. b)As the price of a good falls, the quantity demanded of the good falls. c)As the price of a good rises, the quantity demanded of the good rises. d)As the price of a good rises, the quantity demanded of the good falls.arrow_forward18. _____________________refers to various quantities of a commodity or service that a consumer would purchase at a given time at various prices in a market.arrow_forward
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