The formula consumer surplus uses a consumers "willingness to pay" as part of the equation. Economists uses "willingness to pay" as a stand in for the numerical value of the benefit a consumer receives from purchasing something. If a consumer's "willingness to pay" for a sandwich is $10, what does that mean? Why do economists say that the benefit of that sandwich (to that consumer) is $10?

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.

Question 3 According to the following Figure, please answer a-f 12 D According to this graph, how much is the consumer surplus when price is set at equilibrium (P = $8)? (use the area of triangle: Base x Height x ½) According to this graph, how much is the producer surplus when price is equal to its equilibrium level (P=$8)? (use the area of triangle: Base x Height x ½) In the graph, how much is deadweight loss at a price of P =$8 (equilibrium)? Now, according to this graph, how much is the consumer surplus when price is set below the equilibrium level at P=$5? (Use the area of a triangle and the area of a rectangle, length x length) According to this graph, how much is the producer surplus when price is equal at P= $5? (use the area of triangle: Base x Height x ½) In the graph, how much is deadweight loss at a price of $5? (use the area of a triangle) In all cases please show your calculations so I know how to arrive at those numbers! hp

Must consumers' surplus equal producers' surplus at equilibrium price? please explain