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# CRX5 - Take-home Exercise 2 Prof Potepan Econ 101.01 –...

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Unformatted text preview: Take-home Exercise 2 Prof. Potepan Econ 101.01 – Introductory Microeconomics 3 October 2011 1. Suppose four consumers had the following willingness to pay for slices of pizza. If the price of pizza slices is \$4.00 each, calculate the total amount of consumer surplus these consumers would receive from consuming the pizza. Pizza 0 Consumer Groucho Maximum Willingness to Pay \$7.50 1 Chico \$6.25 _________ 2 Harpo \$4.75 _________ 3 Zeppo \$3.75 _________ Consumer Surplus _________ Willingness to Pay In the space below, plot the maximum willingness to pay for each consumer, and shade in each of their rectangular areas of consumer surplus. \$8.00 \$7.50 \$7.00 \$6.50 \$6.00 \$5.50 \$5.00 \$4.50 \$4.00 \$3.50 \$3.00 \$2.50 \$2.00 \$1.50 \$1.00 \$0.50 \$0.00 0 1 2 Pizza 3 4 2. For the following two markets in equilibrium, calculate the Consumer Surplus, Producer Surplus, and Total Surplus. \$9.00 \$8.00 \$7.00 Supply Price \$6.00 \$5.00 \$4.00 \$3.00 \$2.00 Demand \$1.00 \$0.00 0 100 200 300 400 Quantity Consumer Surplus = Producer Surplus = Price Total Surplus = \$24 \$22 \$20 \$18 \$16 \$14 \$12 \$10 \$8 \$6 \$4 \$2 \$0 Supply Demand 0 2,000 4,000 6,000 Quantity Consumer Surplus = Producer Surplus = Total Surplus = 8,000 10,000 ...
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