(2 points) The graph below describes the effects of an increase in the average consumer income in the market for a normal good. D, is the demand before the increase in income and D, is the demand after the increase. Please use the labeled areas in the graph to answer the following questions. P2 P1 E D2 D1 Q1 Q2 Q (0.5 points) What is the consumer and producer surplus before the increase in consumer income? a. b. (0.5 points) What is the change in consumer surplus and the change in producer surplus after the change in income? C. (0.5 points) Has total welfare increased or decreased? What is the change in total welfare?
(2 points) The graph below describes the effects of an increase in the average consumer income in the market for a normal good. D, is the demand before the increase in income and D, is the demand after the increase. Please use the labeled areas in the graph to answer the following questions. P2 P1 E D2 D1 Q1 Q2 Q (0.5 points) What is the consumer and producer surplus before the increase in consumer income? a. b. (0.5 points) What is the change in consumer surplus and the change in producer surplus after the change in income? C. (0.5 points) Has total welfare increased or decreased? What is the change in total welfare?
Chapter1: Introducing The Economic Way Of Thinking
Section1.A: Applying Graphics To Economics
Problem 2SQP
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