(Figure: Consumer Surplus for Mystery Books) In the figure Consumer Surplus for Mystery Books, when the price falls for a total consumer surplus of from $30 to $25, consumer surplus Price of I

In the preceding diagram what areas represent consumers surplus at the equilibrium price of PE? At PC?

8. U.S. government price supports for milk led to an unceasing surplus of milk. In an effort to reduce the surplus about a decade ago, Congress offered to pay dairy farmers to slaughter cows. Use two graphs, one for the milk market and one for the meat market, to illustrate how this policy should have affected the price of meat. (Assume that meat is sold in an unregulated market.) Be sure to draw the inverse demand and supply curves and label your axes. Explain clearly.

Figure: Leonard's Demand for Pecan Pie) Look at Leonard's weekly demand curve for slices of pie. How many slices of pie is Leonard willing to buy at $3 per slice

8. Total economic surplus The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. (?) PRICE (Dollars per headset) 350 315 280 245 210 175 140 105 70 35 0 0 Demand Supply 55 110 165 220 275 330 385 440 495 QUANTITY (Millions of headsets) Total surplus in this market is $ 550 million. + Equilibrium Consumer Surplus Producer Surplus

6. Determinants of demand The following graph input tool shows the demand for sedans in New York City. For simplicity, assume that all sedans are identical and sell for the same price. Initially, the calculator shows market demand under the following circumstances: average household income is $50,000 per year, the price of a gallon of regular unleaded gas is $3 per gallon, and the price of a subway ride is $1.50. Use the graph input tool to help you answer the questions that follow. (Note: You will not be graded on any adjustment made to the graph used in the tool.) PRICE (Thousands of dollars per sedan) Demand 100 200 300 400 500 600 700 800 900 QUANTITY (Sedans per month) Graph Input Tool Price of a sedan (Thousands of dollars) Quantity of sedans (Sedans per month) Average Income (Thousands of dollars) Price of gasoline (Dollars per gallon) Price of a subway ride Suppose that the price of a sedan decreased from $25,000 to $20,000. This would cause a 25 450 50 $3.00 $1.50 Suppose that…

The table below represents the market for DVDS.     The value of consumer surplus is $__________milon (Enter your reaponse as an integer)

9. Shirts in supply or demana 11 The following graph shows the market for croissants in San Diego, where there are over 1,000 bakeries at any given moment. Suppose an innovation in the baking process makes it possible to produce more croissants at a lower cost than ever before. Show the effect of this change on the market for croissants by shifting one or both of the curves on the following graph, holding all else constant. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per croissant) QUANTITY (Croissants) Supply Demand Demand T Supply ?

5. Complete the sentences: A demand curve shows the quantity demanded at each possible holding the other factors that influence purchases. The quantity demanded is the amount of a good that consumers are willing to given price, holding the other factors that influence purchases. Changes in the quantity demanded in response to changes in price are A change in any relevant factor other than the price of the good causes at a

Marcus buys a tablet for $5,000. What determines the size of consumer surplus Marcus receives? Explain.