Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 3, Problem 6CQ
To determine
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Chapter 3 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- What is marginal benefit? What is marginal cost? What is consumer surplus? What is producer surplus?arrow_forwardReview the graph at right for a competitive market How much is the consumer surplus? Consumer surplus is $x (round your answer to two decimal places). How much is the producer surplus? Producer surplus is $x (round your answer to two decimal places) How much is the total surplus in this market? Total surplus is $x (round your answer to two decimal places). 100- 90- 80- 70-4 60- 50-145 40- 30- 20- 10- Price 0 45 50 60 70 80 Quantity 10 20 30 40 D MC 90 100arrow_forwardGive some examples of products that are likely to have little if any producer surplus and explain why.arrow_forward
- DRAW THE ECONOMIC SURPLUS CURVE AND EXPLAINarrow_forwardwhat is producer surplus and how is it measured? What is the relationship between the cost to sellers and the supply curve? All else being equal, what happens to producer surplus when the price of a good rise?arrow_forwardFor each scenario, decide whether it results in a producer or consumer surplus. Then calculate the resulting surplus. Alice is willing to spend $30$30 on a pair of jeans and has a coupon for $10$10 off. She purchases a pair of jeans that costs $35$35 pre-discount. Alice receives a Alice's surplus: $ Jeff finds steak in the supermarket priced at$16$16 but that he would have been willing to pay $20$20 for. The butcher notices the meat is near the expiration date and gives him an extra 7575% off. Jeff receives a producer surplus. consumer surplus. Jeff's surplus: $ Nicole has a hockey puck from the 2018 Winter Olympic Games and puts it up for sale on eBay. She will only sell the puck if the winning bid is greater than or equal to $500$500. After the bidding closes, the last bid stands at $501$501. Nicole receives a Nicole's surplus: $arrow_forward
- The graph shows the supply curve of smart watches and the market price of a smart watch. Draw the producer surplus from smart watches. Label it. What is producer surplus? Producer surplus is OA. equal to the value that the seller places on the good, summed over the quantity sold OB. received by a producer when price exceeds the marginal cost of production OC. the value of the good minus its marginal cost, summed over the quantity sold D. the marginal benefit received by a producer, summed over all the units sold 500+ 400- 300- 200- 100+ 0- Price (dollars per smart watch) S-MG 0 Market price 1 4 5 6 2 3 Quantity (millions of smart watches per year) >>> Draw only the objects specified in the question. Q 7arrow_forwardWhat happens to total surplus when producer surplus decreases and consumer surplus increases?arrow_forwardA “Spider-man" DVD is worth $30 to Marcus. But he buys one on sale for just $15. What is the consumer surplus that results from Marcus's purchase? $10 $25 $15 Incorrect cannot be determined from the information given Incorrect. $40arrow_forward
- Explain the Consumer Surplus and Producer Surplus concept. Why this surplus concept is important in the market analysis? How price changes create inequilibrium in the market?arrow_forwardAbout the consumer and producer surplus, answer the following questions: a. What is the value of the producer surplus given the graph? b. What is the value of the consumer surplus given the graph? c. What is the value of the consumer surplus given the graph?arrow_forwardDetermine whether the following statements is true or false, and explain why. The consumers’ surplus and the producers’ surplus equal each other.arrow_forward
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