4. Consumer's surplus and price changes The following graph shows the demand curve for a group of students in the market for finance textbooks. Each student wants only one textbook. Assume that if what an individual has a willingness to pay equals the market price, he or she will make the purchase. PRICE (Dollars per textbook) 420 350 280 Alex 2,315 Becky 210 B 140 70 Clancy Eileen Hubert 0 0 1 2 3 4 5 QUANTITY (Textbook) Kate Region A (the green shaded area) represents total consumer's surplus when the market price is $ represents while Region B (the grey shaded area) when the market price Complete the following table by indicating which statements are true or false based on the information provided on the previous graph. Statement Consumer's surplus is smaller when the price is $175 than when it is $245. There are fewer students buying used textbooks when the market price is $175 than when it is $245. Assuming each student receives a positive surplus, Becky will always receive less consumer's surplus than Clancy. True False In order for Kate to earn consumer's surplus of exactly $70 from buying a finance textbook, the market price needs to be $
4. Consumer's surplus and price changes The following graph shows the demand curve for a group of students in the market for finance textbooks. Each student wants only one textbook. Assume that if what an individual has a willingness to pay equals the market price, he or she will make the purchase. PRICE (Dollars per textbook) 420 350 280 Alex 2,315 Becky 210 B 140 70 Clancy Eileen Hubert 0 0 1 2 3 4 5 QUANTITY (Textbook) Kate Region A (the green shaded area) represents total consumer's surplus when the market price is $ represents while Region B (the grey shaded area) when the market price Complete the following table by indicating which statements are true or false based on the information provided on the previous graph. Statement Consumer's surplus is smaller when the price is $175 than when it is $245. There are fewer students buying used textbooks when the market price is $175 than when it is $245. Assuming each student receives a positive surplus, Becky will always receive less consumer's surplus than Clancy. True False In order for Kate to earn consumer's surplus of exactly $70 from buying a finance textbook, the market price needs to be $
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 3.7P
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Transcribed Image Text:4. Consumer's surplus and price changes
The following graph shows the demand curve for a group of students in the market for finance textbooks. Each student wants only one textbook.
Assume that if what an individual has a willingness to pay equals the market price, he or she will make the purchase.
PRICE (Dollars per textbook)
420
350
280
Alex
2,315
Becky
210
B
140
70
Clancy
Eileen
Hubert
0
0
1
2
3
4
5
QUANTITY (Textbook)
Kate
Region A (the green shaded area) represents total consumer's surplus when the market price is $
represents
while Region B (the grey shaded area)
when the market price
Complete the following table by indicating which statements are true or false based on the information provided on the previous graph.
Statement
Consumer's surplus is smaller when the price is $175 than when it is $245.
There are fewer students buying used textbooks when the market price is $175 than when it is $245.
Assuming each student receives a positive surplus, Becky will always receive less consumer's surplus than Clancy.
True
False
In order for Kate to earn consumer's surplus of exactly $70 from buying a finance textbook, the market price needs to be $
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