Exam 7: Consumers Producers and the Efficiency of Markets: Part A

Figure 7-30 -Refer to Figure 7-30.If the market equilibrium price falls from $120 to $80,how much is the change in total consumer surplus in the market?

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price falls from $10 to $5,how much additional consumer surplus do consumers initially in the market at the $10 price receive?

If John's willingness to pay for a good is $20 and the price of the good is $15,how much is John's consumer surplus from purchasing the good?

Figure 7-31 -Refer to Figure 7-31.If the market equilibrium price is $25,how much is total producer surplus in this market?

Figure 7-33 -Refer to Figure 7-33.How much is total consumer surplus in this market at the equilibrium price?

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2.Suppose a reduction in input prices shifts the market supply curve to By how much does total consumer surplus increase as a result of this supply shift?

Answer each of the following questions about supply and producer surplus. a.What is producer surplus,and how is it measured? b.What is the relationship between the cost to sellers and the supply curve? c.Other things equal,what happens to producer surplus when the price of a good rises? Illustrate your answer on a supply curve.

Figure 7-34 -Refer to Figure 7-34.Suppose there is initially a price ceiling set at $4 in this market.If the government removed the price ceiling,by how much would total producer surplus change?

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2.Suppose a reduction in input prices shifts the market supply curve to By how much does total producer surplus increase as a result of this supply shift?

Figure 7-34 -Refer to Figure 7-34.Suppose there is initially a price floor set at $10 in this market.If the government removed the price floor,by how much would total consumer surplus increase?

Figure 7-34 -Refer to Figure 7-34.Suppose there is initially a price ceiling set at $4 in this market.How much is total producer surplus with the price ceiling in place?

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price falls from $10 to $5,how much consumer surplus do consumers entering the market after the price drop receive?

Figure 7-31 -Refer to Figure 7-31.If the market equilibrium price is $35,how much is total producer surplus in this market?

Figure 7-33 -Refer to Figure 7-33.Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.How much is total consumer surplus in this market at the new equilibrium price?

Given the following two equations: 1)Total Surplus = Consumer Surplus + Producer Surplus 2)Total Surplus = Value to Buyers - Cost to Sellers Show how equation (1)can be used to derive equation (2).

Figure 7-31 -Refer to Figure 7-31.If the market equilibrium price rises from $25 to $35,how much is the producer surplus for the producers entering the market after the price increase?

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price rises from $10 to $15,what is the change in total consumer surplus in the market?

Figure 7-30 -Refer to Figure 7-30.If the market equilibrium price falls from $120 to $80,how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

Figure 7-33 -Refer to Figure 7-33.Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.How much is total surplus in this market at the new equilibrium price?

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2.Suppose a reduction in input prices shifts the market supply curve to By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?