Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $5.75$5.75. Michelle was willing to pay up to $7.75$7.75 for the cappuccino, and Paul's Cafe and Bakery was willing to accept $2.25$2.25 for the cappuccino. Based on this information, answer the following questions. Michelle's consumer surplus: $ Paul's Cafe and Bakery's producer surplus: $

Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $5.75$5.75. Michelle was willing to pay up to $7.75$7.75 for the cappuccino, and Paul's Cafe and Bakery was willing to accept $2.25$2.25 for the cappuccino. Based on this information, answer the following questions. Michelle's consumer surplus: $ Paul's Cafe and Bakery's producer surplus: $

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 3.10P

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4. Consumer surplus for an individual and a market The following graph shows Becky's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) 7.50 6.75 6.00 + 5.25 Demand 4.50 + 3.75 3.00 2.25 + 1.50 + 0.75 + 0 0 Price 2 Becky's Weekly Demand P 4 6 8 10 12 14 QUANTITY (Slices of cheesecake) 16 18 20 ? From the previous graph, you can tell that Becky is willing to pay for her 8th slice of cheesecake each week. Because she has to pay only $3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $ Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Becky would receive a consumer surplus of S 8th slice of cheesecake she buys. from the
Suppose that a consumer perceives X and AOG (all other goods) to be perfect (one-for-one) substitutes. The consumer has an income of $100 and the price of x is 80 cents. If the price of x rises to 1.20, what is the resulting change in consumer surplus? Show work and explain
Suppose the price of acai bowls were to fall to $1.50 per bowl. At this lower price, Jake would receive a consumer surplus of $ acai bowl he buys. The following graph plots the monthly market demand curve (blue line) for acai bowls in a hypothetical small economy. Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of acai bowls is $2.25 per bowl. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $1.50 per bowl. PRICE (Dollars per bowl) 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0 0 Demand P = $2.25 P = $1.50 20 Small Economy's Monthly Demand 60 80 100 120 140 160 180 QUANTITY (Thousands of acai bowls) 40 200 Initial Consumer Surplus (P = $2.25) from the 6th Additional Consumer Surplus (P = $1.50)
Q28 Describe where consumer surplus is on the graph (use words or you can also draw and attach a drawing or photo of a drawing).
The following graph shows Hilary's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line From the previous graph, you can tell that Hilary is willing to pay $_______ for her 8th slice of cheesecake each week. Because she has to pay only$3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $_______. Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Hilary would receive a consumer surplus of $_______.from the 8th slice of cheesecake she buys.The following graph shows the weekly market demand for cheesecake in a small economy. Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the…
Wendy drinks 10 sugary drinks and 4 smoothies a week. Smoothies are $5 each and sugary drinks were $2 each. This week, things are different: the government has slapped a tax on sugary drinks and their price has doubled to $4. But it's not all bad news for Wendy. The government has also revised the income tax, so Wendy's drinks budget has increased. She can now just afford to buy her usual 10 sugary drinks and 4 smoothies a week.
The price of DVDs (D) is $20.00 and the price of CDs (C) is $10.00. Phillip has a budget of $100.00 to spend on the two goods. Suppose that he has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 7 more CDs that he would really like to buy.The price of DVDs (D) is $20.00 and the price of CDs (C) is $10.00. Phillip has a budget of $100.00 to spend on the two goods. Suppose that he has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 7 more CDs that he would really like to buy. 1.) Using the line drawing tool, given the above prices and income, draw his budget line in the figure.Label this line 'L'. 2.) Using the point drawing tool, and considering what Phillip has already purchased and what he still wants to purchase, identify the three different bundles of CDs and DVDs that he could choose. Label these points 'bundle 1', 'bundle 2', and 'bundle 3'. (Assume that he cannot purchase fractional units) Carefully follow the…
The table shows Jerry's total utility from lottery tickets and candy bars. The price of a lottery ticket is $2, the price of a candy bar is $4, and Jerry has $12 a week to spend. Calculate Jerry's marginal utility from the fourth lottery ticket and marginal utility per dollar when he buys 4 lottery tickets. Calculate Jerry's marginal utility from the second candy bar and marginal utility per dollar when he buys 2 candy bars >>> Answer to 1 decimal place. ………… Jerry's marginal utility from the fourth lottery ticket is units. The marginal utility per dollar from lottery tickets when Jerry buys 4 lottery tickets is units per dollar. Jerry's marginal utility from the second candy bar is units. The marginal utility per dollar from candy bars when Jerry buys 2 candy bars is units per dollar. C Lottery tickets Total utility 0 14 24 32 38 Quantity per week 0 1 2 3 4 Quantity per week ܘ ܝ ܚ ܚ ܂ 2 3 Candy bars 4 Total utility 0 100 120 134 144
Explain the meaning of consumer surplus with the help of example.
Suppose Yvette just sat down to enjoy the Double Stack burger that she purchased for $1.00. Her friend, Sean, would also like a Double Stack burger, but he strongly dislikes standing in line. Sean offers to buy Yvette's Double Stack rather than wait in line himself and pay $1.00. The following table shows some hypothetical offers Sean might make for Yvette's burger. First, compute the consumer surplus Yvette gets from buying the burger for $1.00, refusing Sean's offers, and eating the burger. Enter these amounts in the second column of the following table. Next, compute the consumer surplus she gets from buying the first burger at $1.00, selling it to Sean at each price listed, purchasing another burger for $1.00, and consuming it. Enter these amounts in the third column of the table. Again, assume that Yvette's cost of waiting in line for a burger is zero. Note: If Yvette is willing to sell her burger to Sean while at the Wendy's restaurant, she would purchase another burger…
Basil is a broke college student who consumes only coffee and pizza. No one is really sure how he can survive on those two goods alone, but somehow he does. Coffee is $2 per cup, and pizza is $5 per pizza. Basil's weekly budget constraint is shown below. On the graph below show how his budget constraint would change if Basil gets an additional $10 per week from his grandmother. Coffee (cups per week) 15 14 13 3 210 000 654 120 w 2 -N Budget Constraint 0 01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Pizza (number per week)
Raymond consumes meatloaves and pineapples. He has decided that hismonthly budget will be $1500. Suppose that one meatloaf costs $375, while one pineapple costs $150. Suppose Raymond decides to cut his monthly budget in half. Coincidentally, the next time he shops, he learns that meatloaves and pineapples are on sale for half price. Show what happens to Raymond’s budget line?