Suppose Brian is willing to pay a total of $90,000 for an electric vehicle.True or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Brian will buy the electric vehicle because it would be worthmore to him than its market price of $135,000.TrueFalse 2. Individual demand and consumer surplusConsider the market for electric vehicles. The market price of each electric vehicle is $135,000, and each consumer demands no more than oneelectric vehicle.Suppose that Tim is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $270,000. Based on Tim'swillingness to pay, the following graph shows his demand curve for electric vehicles.Shade the area representing Tim's consumer surplus using the green rectangle (triangle symbols).PRICE (Thousands of dollars)360t315PRICE (Thousands of dollars)27022510013512Homework (Ch 07)Now, suppose another buyer, Alyssa, enters the market for electric vehicles, and her willingness to pay is $180,000.300Based on Alyssa's and Tim's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol).Next, shade Tim's consumer surplus using the green rectangle (triangle symbols), and shade Alyssa's consumer surplus using the purple rectangle(diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.311270775Tim's Demand100Market Price135Tim's Consumer SurplusMarket PriceDemand Curve?T's Consumer SurplusAlyssa's Consumer Surplus

Market demand is defined as the aggregation of individual demand curves. The individual demand curve…

Suppose Brian is willing to pay a total of $90,000 for an electric vehicle. True or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Brian will buy the electric vehicle because it would be worth more to him than its market price of $135,000. True False

Suppose Brian is willing to pay a total of $90,000 for an electric vehicle. True or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Brian will buy the electric vehicle because it would be worth more to him than its market price of $135,000. True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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