Microeconomics- Chapter 5 Market Failures: Public Goods and Externalities: McConnell Brue Flynn 2e (Class Work)

8. Denise values a dishwasher at $500, but buys it for $350, what is her Consumer Surplus?

$150

5. Refer to Table 2: If tickets sell for $40 each, then what id the total consumer surplus in the market?

$30

7. Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying a new one for $425. Billie Jo's willingness to pay for the dishwasher is?

$500

10. Refer to figure 1: When price is P2, Consumer surplus is:

A

9. Refer to Figure 1: When price id P1, Consumer surplus is:

A+B+C

13. Refer to Figure 2: If the government imposes a price floor of $110 in this market, the consumer surplus and producer surplus will decrease and increase by:

CS= 1/2 (10x40) = 200 <-- is correct unsure if the rest is correct... PS= 1/2(10x80) = 400 CS+PS = 600

12. Refer to Figure 2: At the Equilibrium price, Consumer Surplus and Producer Surplus are:

CS= 1/2 (80x20) = 800 PS = 1/2 (40x20) = 400

2. Refer to Table 1: If the price of the product is $130, then who would be willing to purchase the product?

Calvin and Sam.

1. Refer to Table 1: If the price of the product is $110, then who would be willing to purchase the product?

Calvin, Sam, Andrew.

11. Refer to Figure 1: When the price falls from P1 to P2, Consumer surplus:

Decreases by an amount equal to B+C

Figure 2 is also a Right triangle, yet it is too complex to explain:

FIGURE 2

4. Refer to Table 2: If you have a ticket that you sell to the group in an auction who will buy the ticket?

Lisa

Figure 1 is a right triangle: P on Y axis, Q on X axis. The Demand line makes the Hypotenuse. Above line P2 is area A. Below P1 is D and F. In between P1 and P2 is area B and C Where P2 and Q2 meet area B and D and inside. Where P1 and Q1 meet area D and F meet.

Plot this triangle.

3. Refer to Table 2: If you have a ticket that you sell to the group in a auction, what would the selling price be?

Slightly more that $50

Table 1: BUYER WTP Calvin $150 Sam $135 Andrew $120 Lori $100

TABLE 1

Table 2: BUYER WTP Jennifer $10 Bryce $15 Dan $20 David $25 Ken $50 Lisa $60

TABLE 2

6. Refer to Table 2: If tickets sell for $25 each, the what is the total consumer surplus in the market?

a. $150 b. $35<--WRONG c. $60 d. $850