Economics (7th Edition) (What's New in Economics)
Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 4, Problem 4.1.12PA
To determine

The consumer surplus for an essential drug.

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Suppose the following graph shows the demand for, and supply of, apartments in New York City. Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of apartments in the absence of price controls. Then use the green point (triangle symbol) to fill the area representing consumers' surplus, and use the purple point (diamond symbol) to fill the area representing producers' surplus. MONTHLY RENT (Dollars per apartment) 2800 2600 2400 2200 2000 1800 0 Demand Supply 0.8 3.2 QUANTITY OF APARTMENTS (Millions per month) 1.6 2.4 4.0 Equilibrium A CS PS ?
Economists in Champaign have been studying the local market for pizza. The market is described in the graph below:     Some research by the local university shows that eating pizza improves health in several ways. The local government decides to subsidize pizza consumption paying for $2 of every pizza sold(essentially a negative tax of $2).  How much will the government spend with this subsidy?
Use the following graph to answer the question: how much is producer surplus? What is the total value to consumers of consuming the first ten units of this good?   Use the following graph to answer the question: how much is producer surplus? What is the total value to consumers of consuming the first ten units of this good?
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