Given the demand curve in Figure 5-24, explain how consumer’s surplus is calculated.
What will be an ideal response?
The area under the demand curve above market price is the consumer’s surplus, equal in dollar terms to $36. It represents additional value above market cost for which the consumer does not have to pay.
You might also like to view...
Use the information in the table below.Total salesIndustry 1Firm 1$5.3mFirm 2$199,000Firm 3$2.6mFirm 4$850,000What percent of total sales does Firm 1 make up in Industry 1?
A. 89% B. 53% C. 59% D. 25%
What are the payments each factor of production receives?
What will be an ideal response?
When your income increases
A) your budget line shifts rightward and its slope does not change. B) your budget line shifts leftward and its slope does not change. C) the slope of your budget line increases. D) the slope of your budget line decreases.
The table above shows the marginal benefit from providing police protection in a community of two people, Jake and Elwood. Police protection is a public good
a) What is the marginal social benefit to community from the 4th police car on duty? b) If the marginal social cost of a police car on duty is $37, what is the efficient number of cars on duty? c) If the marginal social cost of a police car on duty is $70, what is the efficient number of cars on duty?