MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 3.A, Problem 12SQ
To determine
The
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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?
Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay for a good or service. ... The producer surplus is the difference between the actual price of a good or service–the market price–and the lowest price a producer would be willing to accept for a good.
Given the following information, calculate both the producer and consumer surplus
a. P- 140 = - .5q
b. MC = 10 + 4q
show all working and draw graph
When an economist refers to "an efficient allocation of resources," she typically means
is maximized.
Select one:
a. consumer surplus, but not producer surplus
b. producer surplus, but not consumer surplus
C. the sum of consumer and producer surplus
d. consumer surplus minus producer surplus
Chapter 3 Solutions
MACROECONOMICS FOR TODAY
Ch. 3.7 - Prob. 1YTECh. 3.7 - Prob. 1GECh. 3.7 - Prob. 2GECh. 3.7 - Prob. 3GECh. 3.A - Prob. 1SQPCh. 3.A - Prob. 2SQPCh. 3.A - Prob. 3SQPCh. 3.A - Prob. 4SQPCh. 3.A - Prob. 1SQCh. 3.A - Prob. 2SQ
Ch. 3.A - Prob. 3SQCh. 3.A - Prob. 4SQCh. 3.A - Prob. 5SQCh. 3.A - Prob. 6SQCh. 3.A - Prob. 7SQCh. 3.A - Prob. 8SQCh. 3.A - Prob. 9SQCh. 3.A - Prob. 10SQCh. 3.A - Prob. 11SQCh. 3.A - Prob. 12SQCh. 3.A - Prob. 13SQCh. 3.A - Prob. 14SQCh. 3.A - Prob. 15SQCh. 3.A - Prob. 16SQCh. 3.A - Prob. 17SQCh. 3.A - Prob. 18SQCh. 3.A - Prob. 19SQCh. 3.A - Prob. 20SQCh. 3 - Prob. 1SQPCh. 3 - Prob. 2SQPCh. 3 - Prob. 3SQPCh. 3 - Prob. 4SQPCh. 3 - Prob. 5SQPCh. 3 - Prob. 6SQPCh. 3 - Prob. 7SQPCh. 3 - Prob. 8SQPCh. 3 - Prob. 9SQPCh. 3 - Prob. 10SQPCh. 3 - Prob. 11SQPCh. 3 - Prob. 12SQPCh. 3 - Prob. 1SQCh. 3 - Which of the following would not cause market...Ch. 3 - Prob. 3SQCh. 3 - Prob. 4SQCh. 3 - Prob. 5SQCh. 3 - Prob. 6SQCh. 3 - Prob. 7SQCh. 3 - Prob. 8SQCh. 3 - Prob. 9SQCh. 3 - Prob. 10SQCh. 3 - Prob. 11SQCh. 3 - Prob. 12SQCh. 3 - Prob. 13SQCh. 3 - Prob. 14SQCh. 3 - Prob. 15SQCh. 3 - Prob. 16SQCh. 3 - Prob. 17SQCh. 3 - Prob. 18SQCh. 3 - Prob. 19SQCh. 3 - Prob. 20SQCh. 3 - Prob. 21SQCh. 3 - Prob. 22SQCh. 3 - Prob. 23SQCh. 3 - Prob. 24SQCh. 3 - Prob. 25SQ
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- For 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_forwardWhy does producer surplus arise? Consumers buy less of some commodities than they need. Sellers' costs of production for some goods are less than the market price. Producers make more off some commodities than the consumers desire. Sellers manufacture more units of a good than consumers are willing to purchase.arrow_forward© Macmillan Learning b. How much does this new technology increase consumer surplus? Increase in consumer surplus: $ 1050 Increase in producer surplus: $ Incorrect c. How much does this new technology increase producer surplus? 1050 Incorrect d. How much does this new technology increase total (or social) surplus?arrow_forward
- A. The demand curve for a product is D = -2p + 800 , where the demand is units , and p is the price in $ . When the price is $ 100 , calculate the consumer surplus . Also , show a graph that indicates the consumer surplus . B. The supply curve for a product is S = 5p - 400 , where the supply is 5 units , and p is the price in $ . When the price is $ 200 , calculate the producer surplus . Also , show a graph that indicates the producer surplusarrow_forwardDefine consumer and producer surplus and give a geometric interpretation of each.arrow_forwardIn a supply-and-demand graph, producer surplus can be pictured as the Select one: a. vertical intercept of the supply curve. b. area between the demand curve and the supply curve to the left of equilibrium output. c. area under the supply curve to the left of equilibrium output. d. area under the demand curve to the left of equilibrium output. e. area between the equilibrium price line and the supply curve to the left of equilibrium output.arrow_forward
- A “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_forwardb) calculate the consumer surplus before tax. c) calculate the producer surplus before tax. d) For the market for cigarettes with the tax. Indicate:i) the taxii) price paid by consumersiii) price received by producersiv) Quantity of cigarettes sold e (i) calculate the consumer surplus after the tax.ii) calculate the producer surplus after the tax.iii) Tax revenueiv) Deadweight lossv) Total surplus after taxarrow_forwardI think the answer for the following question is $60 because of 200-140 but I am not entirely sure. Marco goes to the pet store to buy a dozen Koi fish for his new Koi pond. He is willing to pay $200 for the dozen fish, but buys them for a total of $140. Marco's consumer surplus from the purchase is A) $5. B) $60. C) $140. D) $200.arrow_forward
- Total surplus in the market $...........arrow_forwardIn the market for pizza, both consumer surplus and producer surplus will increase when the price of a pizza increases from $3 to $6. O True Falsearrow_forwardCalculate the level of consumer and producer surplus when demand and supply are given by D and S0 respectively.Consumer surplus: Producer surplus:arrow_forward
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