Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 7, Problem 11P
(a)
To determine
The producer, consumer, and social surplus from the given diagram.
(b)
To determine
The interpretation from the given information for:
(a) change in consumer surplus.
(b) changes in producer surplus.
(c) change in social surplus.
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The following diagram shows supply and demand in the market for tablets.
Use the black point (plus symbol) to indicate the equilibrium price and quantity of tablets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus.
Regarding the conditions for the maximization of the total surplus, choose the correct words below.
“The goods are produced by the producers with the (highest / lowest) costs. Raising or lowering the quantity of a good would not (decrease / increase) total surplus. The goods are consumed by the buyers who value them (least / most) highly
Over the past few year's consumer tastes and
the number of buyers in the market for a
game called 'pickle ball' have increased
dramatically. Thus, the demand for tickets to
pickle ball events has increased. Before this
all started the equilibrium price of a ticket to a
pickle ball event was negative. This means
that:
A few years ago, there would have been a
surplus of tickets even at a price of zero, now
the invisible hand has pushed prices to
greater than zero.
A) A few years ago, the quantity of tickets
demanded was less than quantity supplied.
B) Pickle ball event tickets resembled the
market for recyclable cardboard a few years
ago
C) Greater demand for pickle ball tournament
tickets will lead to a greater demand - and
higher pay - for professional pickle ball
players.
D) All of the above.
E) B and D only
Chapter 7 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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