Exam 5: Efficiency and Equity

The market demand curve also is

-In the figure above, for each CD, the price a consumer is willing to pay is equal to the

A used car was recently priced at $20,000.00. Seeing the car, Bobby thought, "It's nice, but if I have to pay more than $19,500 for this car, then I would rather do without it." After negotiations, Bobby purchased the car for $19,250.00. His consumer surplus was equal to

A market demand curve is constructed by

For many years short wave radios were a way of getting news from faraway places and in difficult conditions. But as new technologies have spread, the people listening to these devices has decreased. (Source: The Economist, July 7, 2012) As new technology creates substitutes for short-wave radios, the demand for short-wave radios ________ and the consumer surplus from short-wave radios ________.

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the gallon that gives Dana exactly zero consumer surplus is

An external benefit is a benefit that ________.

-The figure tells us about the market for red roses. The consumer surplus is ________ a day.

If the market for diamonds is a monopoly, then

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.