9. Explain the concepts of producer surplus and consumer surplus in your own words. Use the example of a market for computer games in your explanation.
Q: Since each country's real GDP is measured in a different currency, before one can compare the real…
A: Real GDP is a measure of the economy that is used to describe the output of a nation over a given…
Q: Hotel Prices. Hotel room pricing changes over time (Lodging Magazine), but is there a difference…
A: European City U.S. City…
Q: 11. Let's imagine that we're holding this course in a classroom, and you have to commute to get on…
A: Externalities are the unintended side effects of economic activities that impact third parties who…
Q: Using the model developed in The Economy Unit 3, Section 3.7, consider an individual who is facing a…
A: A wage refers to the monetary compensation or payment that is provided to an individual in exchange…
Q: The following graph shows exports from the United States to Japan. (Note: U.S. exports are measured…
A: The price of one currency in terms of another currency is known as the exchange rate.Fixed exchange…
Q: Which combination maximises excess portfolio expected return per unit of risk? What is the economic…
A: A portfolio of investments refers to a collection or combination of various financial assets, such…
Q: Assume that the demand curve D(p) given below is the market demand for widgets: Q=D(p)=2636−22p , p…
A: When the quantity of supply and demand are equal, equilibrium occurs. It is found by equalizing the…
Q: CALCULATIONS More Saving 3 4 5 6 7 8 9 10 11 12 13 14 15 Consumption Goods Consumption Goods…
A: Let's denote the production of consumption goods as C and the production of capital goods as K. We…
Q: 6. Expectations and the modern view of the Phillips curve The following graph shows the short-run…
A: Short run Philips Curve denotes a situation of high inflation and low unemployment rate and vice…
Q: Price Level P 0 LRAS E YfY Inflationary Gap AS AD2 AD 1 Real Output
A: Recessionary Gap or Deflationary Gap is a situation when the eq. gdpGDP is lesser than the potential…
Q: Reset the graph to the initial state. Then, for each action described in the following table,…
A: Since you have posted multiple questions with multiple sub parts, we will provide the solution only…
Q: Consider the AS/AD model. The AS curve is: Ỹ₁ = a - bm(x₁ - 7) and the AD curve is: T₁ = π₁-1 + VỸ₁…
A: Aggregate demand refers to the total demand for commodities and services made by all the economic…
Q: Suppose that a competitive industry is buying and selling at an equilibrium price of $12. Now…
A: An increasing cost industry is a concept in economics that describes an industry where the average…
Q: Please no written by hand and no emage A way to measure uncertainty of outcome is (choose only one…
A: Let we show that given option betting market priceBetting market prices reflect the odds and…
Q: The economy of Carlsberg is presently in equilibrium, but is suffering a recession as depicted in…
A: Aggregate demand is the total amount of goods and services that all sectors of an economy are…
Q: You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them…
A: Cross-price elasticity for demand of good x with respect to price of good y is calculated as When…
Q: In Fruitland, strawberries are sold in 4-litre baskets to customers on a "pick-your-own" basis.…
A: Collusion often involves competitors or firms within the same industry working together to eliminate…
Q: The nominal exchange rate is the price of one currency in terms of another currency. A nominal…
A: Currency appreciation refers to a gain in a currency's worth as compared to another currency, whilst…
Q: Briefly describe the factors behind the emergence of the New International Division of Labor. How…
A: ***Since the student has asked for a specific part of the question to be solved, so the expert has…
Q: With the data provided in the following table it is requested: (a) Calculate the marginal product…
A: Total Product (TP): Total Product (TP) refers to the total output or quantity of goods produced by…
Q: If velocity does not change when the money supply of a country increases, will nominal GDP…
A: The velocity of money refers to the number of times a currency changes hand. The nominal GDP is the…
Q: Suppose we have the following annual information about a wine producer of Shiraz: wages $300,000,…
A: Value added is a measure of economic contribution that a business or producer makes to a product…
Q: 19. Do banks earn interest on the reserves that they hold? A. Banks earn 0% interest on the reserves…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: The current Discount Rate is 0.5%. The current Federal Funds Rate is 0.5%. The interest paid on…
A: The surplus cash that banks retain above and above their required reserve levels are referred to as…
Q: Assume for this question the principal wants to achieve the bad effort at the lowest cost then what…
A: In this economic scenario, an agent can choose between two efforts, "good" or "bad," affecting…
Q: a) The table below was extracted from Elegance Holdings Ltd Company costing records. Use the data to…
A: Total cost refers to the total expenditure incurred by a business or organization in order to…
Q: The French autoroute network is composed of toll motorways with entrances marked as such. A motorist…
A: Toll equilibrium, also known as congestion toll equilibrium, is a concept in transportation…
Q: If ß(1 +R) < 1, then: O consumption growth is negative. O you began to do precautionary saving. O…
A: In economics, consumption is the act of the use of goods and services to fulfill contemporary needs…
Q: Determine the values of X and Y so that all three cash flows are equivalent at an interest rate of…
A: Cash flow is the movement of money in and out of a company. Cash received signifies inflows, and…
Q: Use the direct capitalization approach to income valuation to calculate the market value of the…
A: The given question pertains to the valuation of a warehouse using the direct capitalization…
Q: 3. Is bundling profitable? Suppose that Ana is the owner of the only nonmotorized water sports…
A: On the income statement, profit is known as net income, but most people refer to it as the bottom…
Q: What would the price per unit be if the firm in the figure below is producing the number of outputs…
A: The graph shows 4 curves:Demand curveMC - Marginal Cost curveMR - Marginal revenue curveATC -…
Q: R₁S₁, R₂S2, R3S3 and R4S4 are production possibility curves (PPC) for four different countries 1, 2,…
A: Opportunity cost refers to the value of the next best alternative that must be forgone when a…
Q: You and your partner have become very interested in cross-country motorcycle racing and wish to…
A: Present worth (PW) is the current estimate of a sum of money that will occur in the future.…
Q: The following graph shows the daily market for blueberry pickers in Florida. Show the effect of the…
A: A demand curve depicts the inverse relationship between the price and quantity demanded of a…
Q: A construction company is planning to invest for the purchase of a heavy construction equipment…
A: Alternative 1:Initial cost=2700000Annual savings=525000Salvage value=710000Alternative 2:Initial…
Q: Consider the market for loanable funds. Suppose the demand for loans is given by i 100-30+m, and the…
A: The demand for loanable funds represents the total amount of funds that borrowers are willing and…
Q: Suppose you have two types of users for your software: basic users and professionals. The value each…
A: To price your advanced program in a way that only professionals would buy it and you maximize…
Q: The following categories are currently part of the Federal Reserve's Balance Sheet as assets or…
A: The Federal Reserve is the central banking system of the United States. It plays a crucial role in…
Q: [39] Consider the following dynamic game: Player 1 moves first, choosing between strategies A and B.…
A: A subgame refers to a smaller portion of a larger game that arises when players reach a decision…
Q: The BRICS initially had high economic growth rates and increasing values of exports and imports. In…
A: The global economy highlights the connections that exist within different markets connected through…
Q: . Estimate the rate of return (yield to maturity) if you as an investor purchase a one-year US TN at…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Consider an economy with a corn producer, some consumers, and a government. In a given year, the…
A: The value of output less the value of goods and services utilised to produce these outputs…
Q: 8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds…
A: As societies worldwide seek to transition towards more sustainable transportation options,…
Q: d) On your diagram, illustrate and explain how the wage increase can lead them to have: i. more…
A: In this analysis, we delve into the decision-making process of an individual facing a wage increase.…
Q: Keynesian perspective, explain what is happening in our economy based on the perspective and draw a…
A: AD (Aggregate Demand ) : F ( C , G , I , NX , M/P ) Aggregate Demand depicts inverse…
Q: Initial cost EUAB Life ROR A $600 82 10 years 6.1% O True O False B $1,200 196 10 years 10.1% MARR -…
A: MARR stands for "Minimum Acceptable Rate of Return." In economics, it represents the lowest rate of…
Q: (b) Derby County Football Club has found that the price elasticity of demand for their tickets is…
A: The responsiveness of demand to change with its price is measured by the price elasticity of demand.…
Q: IC E 4 YA X Jimmy can consume goods X and Y. The graph above represents one of his indifference…
A: The utility function refers to all those commodity bundles that derive the same amount of utility…
Q: The food and feed demand curves used in the Application "Summing the Corn Demand Curves," were…
A: To derive the total demand curve, we need to sum the individual food and feed demand curves and…
Step by step
Solved in 3 steps
- 11. Differentiate between the consumer and producer surplus. Explain.1. Determine the amount of consumer surplus generated in each of the following situations a. William goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. At the cash register, he is told that his T-shirt is on sale for half the posted price. b. Sophia goes to the CD store hoping to find a used copy of the Eagles Greatest Hits for up to $10. The store has one copy selling for $10 c. After baseball practice, Nicholas is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 a bottle.7. Total economic surplus The following diagram shows supply and demand in the market for laptops. Use the black point (plus symbol) to indicate the equilibrium price and quantity of laptops. 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. PRICE (Dollars per laptop) 250 225 200 175 150 125 100 75 50 25 0 0 Demand Supply 35 70 105 140 175 210 245 280 315 350 QUANTITY (Millions of laptops) Total surplus in this market is $ million. + Equilibrium A Consumer Surplus Producer Surplus (?)
- 3. PLEASE READ CAREFULLY AND SAY THE BEST ANSWER The total surplus of a pure and perfect market is represented by the sum of the areas a) ABDEFGHIJ • b) ADEFGH • C) ABDEFGH. • d) ACDE1. It is a hot day, and Seth is thirsty. Here is the value he places on each bottle of water. Value of first bottle P7 Value of second bottle P5 Value of third bottle P3 Value of fourth bottle P1 a. Form this information, derive Seth's demand schedule. Graph his demand curve for bottled water. b. If the price of a bottle of water is P4, how many bottles does Seth buy? How much consumer surplus does Seth get from his purchase? Show Seth's consumer surplus in your graph. c. If the price falls to P2, how does Seth's consumer surplus change? Show these changes in your graph.8. Total economic surplus The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. 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. PRICE (Dollars per headset) 250 225 200 175 150 125 100 75 50 25 0 Demand Supply 0 25 50 75 100 125 150 175 200 225 QUANTITY (Millions of headsets) Total surplus in this market is $ 250 million. Equilibrium A Consumer Surplus Producer Surplus ?
- 8. Total economic surplus The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. 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. PRICE (Dollars per headset) 400 380 280 240 200 160 120 80 40 0 0 Demand Supply 300 375 450 525 600 QUANTITY (Millions of headsets) 75 150 Total surplus in this market is 750 $160,000 million. Equilibrium Consumer Surplus ◇ Producer Surplus2. There are six potential consumers of computer games, each willing to buy only one game. Consumer 1 is willing to pay $40 for a computer game, consumer 2 is willing to pay $35, consumer 3 is willing to pay $30, consumer 4 is willing to pay $25, consumer 5 is willing to pay $20, and consumer 6 is willing to pay $15. a. Suppose the market price is $29. What is the total consumer surplus? b. The market price decreases to $19. What is the total consumer surplus now? c. When the price falls from $29 to $19, how much does each consumer’s individual consumer surplus change? How does total consumer surplus chan8. Total economic surplus The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. 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. PRICE (Dollars per headset) 250 225 200 175 150 100 50 25 Demand 0 Supply 25 NO 75 100 125 100 QUANTITY BUN 175 200 225 250 + Equilibrium A Consumer Surplus Producer Surplus
- 8. Consumer and Producer Surplus Suppose Charles is the only seller in the market for bottled water and Yakov is the only buyer. The following lists show the value Yakov places on a bottle of water and the cost Charles incurs to produce each bottle of water: Yakov's Value Value of first bottle: $7 Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1 Charles's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7 The following table shows their respective supply and demand schedules: Price Quantity Demanded Quantity Supplied $1 or less 4 о $1 to $3 3 1 $3 to $5 2 2 $5 to $7 1 3 More than $7 0 4 Use Charles's supply schedule and Yakov's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table. Price Quantity Demanded Quantity Supplied 2 4 A price of brings supply and demand into equilibrium. At the equilibrium price, consumer…15) Using the following graph, show what happens to consumer surplus when a new technology reduces the cost of production. Po Do Quantity1. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this game; and the 10,000 casual gamers who will pay up to $50 a year to play this game. If TopGames can NOT price discriminate, what is its profit-maximizing price? What is its profit? a. Price = $50; Profit = negative $100,000 b. Price = $50; Profit = $300,000 c. Price = $150; Profit = $100,000 d. Price = $150; Profit = $500,0002. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this…
