Figure 7-5.on the graph below, q represents the quantity of the good

Figure 7-5.On the graph below, Q represents the quantity of the good and P represents the good’s price.

 

 

 

 

Refer to Figure 7-5. If the price of the good is $14, then producer surplus is

a.

$17.

   

b.

$22.

c.

$25.

d.

$28.

 

 

Figure 7-9

 

 

Refer to Figure 7-9. If the price decreases from $22 to $16, consumer surplus increases by

a.

$120.

b.

$360.

c.

$480.

d.

$600.

 

Refer to Figure 7-9. IF 40 units of the good are being bought and sold, then

  1. The marginal cost to seller is equal to the marginal value to buyers
  2. The marginal value to buyers is greater than the marginal cost to seller
  3. The marginal cost to sellers is greater than the marginal value to buyers
  4. Producer surplus would be greater than consumer surplus.

 

 

 

 

Figure 7-20

 

 

 

 

 

 

48

44     A

40

36

32     F                                                              G

 

28

24     H

20                                                                                                           B                                                                            

16

12

8        C

4

 

             1         2        3        4       5     6        7        8        9        10        11    Quantity

 

 

 

Refer to Figure 7-20. At Equilibrium, total surplus is

  1. $36
  2. $72
  3. $108
  4. $144

Figure 8-2          

The vertical distance between points A and B represents a tax in the market.

 

Refer to Figure 8-2  

The loss of consumer surplus as a result of the tax is

  1. $1.50    B.    $3   C.    $4.50   D.   $6.
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