EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 5, Problem 3QR
To determine
Determine why economists focus on consumer and producer ‘surplus ’rather than on the possibility of consumer and producer ‘loss’
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What is producer surplus? How is it illustrated on a demand and supply diagram? Give an example of producer surplus.
What is a producer surplus? Describe how it is illustrated on a supply and demand diagram?
What is the value of consumer surplus? What is the value of producer surplus?
Chapter 5 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Review 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_forwardAnswer the following questions based on the graph that represents Kyle's demand for ribs per week at Big Ed's Barbecue. f. If the price of ribs rose to $10, what would happen to Big Ed's producer surplus? g. What is the total surplus in this market at a price of $10? h. If the price of ribs fell to $5, what would be Kyle's consumer surplus? j. What is the total surplus in this market at a price of $5?arrow_forwardHow to solve economic surplus tablearrow_forward
- Using a graph showing the concepts of producer and consumer surplus, discuss the argument ‘it would have been more efficient if supermarkets had increased the price of toilet paper in early 2020.’ Would raising the price of toilet paper have been unfair?arrow_forward1) Complete the first two rows of the following table by indicating which areas on the graph represent consumer surplus and producer surplus prior to the shift in supply. Then complete the second two rows by indicating which areas on the graph represent consumer surplus and producer surplus after the change in production costs. Check all that apply. A B C D E F G Initial Consumer Surplus Initial Producer Surplus New Consumer Surplus New Producer Surplus 2) True or False: Consumers are hurt most by rising production costs when the supply of silverware is very elastic. True Falsearrow_forwardUse the chart in first picture to answer question 10 D about “what is the total surplus of price ceiling?”arrow_forward
- Identify at least one positive externality from running a donut shop. Identify at least one negative externality from running a donut shop. Explain how these positive and negative externalities could impact the donut shop’s profits. (Hint: think subsidy for positive externality and tax for negative externality.) Draw two graphs that show the price of donuts before and after the positive and negative externality impacted the price of your donuts.arrow_forwardUse 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?arrow_forwardSuppose 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. 2800 Demand 2600 2400 2200 2000 1800 Supply 2.4 3.2 QUANTITY OF APARTMENTS (Millions per month) 4.0 Equilibrium A CS PS Suppose that the government decides to impose a rent control of $2,100 per month on rental apartments in New York City. On the following graph, use the green point (triangle symbol) to shade the area representing consumers' surplus in the presence of rent control. Use the purple point (diamond symbol) to shade the area representing producers' surplus after the rent control. Then use the grey point (star symbol) to shade the area representing deadweight loss…arrow_forward
- Based on this graph, Calculate producer surplus from 500 pairs of shoes.arrow_forwardThe graph shows the supply curve of candles and the market price of a candle. What is the quantity of candles sold? Calculate the producer surplus, the total revenue from the candles, and the cost of producing them. *** Draw a point to show the quantity of candles sold and the price. Draw a shape that represents the producer surplus. The producer surplus is $ The total revenue is $. The total cost of producing 20 candles is $ 50.00 40.00- 30.00 20.00 10.00- 0.00+ 0 Price (dollars per candle) S Market price 40 60 20 Quantity (candles per day) >>> Draw only the objects specified in the question. 80 Qarrow_forwardCalculate the consumer surplus and producer surplus using the graph below. If the consumer surplus was $0, would consumers still benefit by participating in this market? Price 50 40 30 20 10 100 200 300 400 Supply Demand 500 Quantityarrow_forward
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