Question 47 Do all consumers receive the same level of consumer surplus Explain with an example. Question 48 Consider a good that you do not like at all, perhaps turnips. Given the market price for turnips, what would be your consumer surplus Question 49 Examine the accuracy of the following statement Given that burgers and fries are complementary goods, if the price of fries increases the demand for both goods will fall Question 50 If a good is considered to be a luxury good, does it mean that the law of demand does not hold Question 51 Suppose demand is given by ππ π·π· = 6 β a. Graph the demand curve. b. If the price were $2, what is consumer surplus c. If the price goes up to $4, what is the new consumer surplus This new surplus should be lower; explain why. Question 52 In each of the following cases, identify whether a competitive firmβs producer surplus will increase, decrease, or remain unchanged. β’ The demand for the product increases β’ The firmβs marginal cost of production increases β’ The market price of the product falls Question 53 In an unregulated, competitive market we could calculate consumer surplus if we knew the equations representing supply and demand. For this problem assume that supply and demand areas follows Supply ππ = 4 + 0.116ππ Demand ππ = 25 β 0.10ππ, where P represents unit price in dollars and Q represents number of units sold each year. Calculate the annual value of aggregate consumer surplus. Question 54 In an unregulated competitive market, supply and demand have been estimated as follows Demand ππ = 25 β 0.10ππ Supply ππ = 4 + 0.116ππ, where P represents unit price in dollars, and Q represents number of units sold per year. a. Calculate annual aggregate consumer surplus. b. Calculate annual aggregate producer surplus. c. Define what producer surplus means.
