Option 'D' is correct.
Consumer surplus is defined as difference between the total amount that a consumer is willing to pay and total amount that the consumer is actually paying (depending upon market price).
Consumer surplus is the area under the demand curve, above the market price.For region OA, market price is T, so area above the line TE will be the consumer surplus. Hence consumer surplus will be area of DTE.
Price D Quantity D) TEAO The money value of consumer's surplus at the level of consumption...
If velocity=4, the quantity of money= 20,000, and the price level =2.5 then the real value of output is....? A) 2,000 B)200,000 C)12,500 D)32,000
Figure 30-1 Value of Money MSI MS2 ----VAJB Money Demand Quantity of Money Refer to Figure 30-1. If the current money supply is MS1, then Select one: a. equilibrium exists when the equilibrium is at point D. b. equilibrium exists when the value of money is 2. C. equilibrium exists when the value of money is 1. O d. there is excess demand if the value of money is 2. When the money market is drawn with the value of...
2. On the first graph, show the initial consumer's surplus. On the second graph show how consumer's surplus changes when price decreases. On the third graph, show how consumer's surplus changes when the demand increases. Price Demand Demand Demand 0 Quantity
Demand Q2 Q Quantity According to the graph shown, at the price of P2, consumer surplus is OB O A+B+C+D+E Oc OA
The quantity theory of money states that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate. Using an appropriate diagram, explain the adjustment process in the case of decrease in the money supply.
Fill in the value of Money column in the following table. Quantity of Money Demanded Price Level (P) Value of Money (1/P) (Billions of dollars) 1.00 2.0 1.33 2.5 2.00 4.0 4.00 8.0 Now consider the relationship between the price level and the quantity of money that people demand. The lower the price level, the money the typical transaction requires, and the money people will wish to hold in the form of currency or demand deposits. Assume that the Fed...
Fill in the Value of Money column in the following table. Price Level (P) Value of Money 0.80 1.25 1.00 1.00 1.33 0.75 2.00 0.50 Quantity of Money Demanded (Billions of dollars) 2.0 2.5 4.0 8.0 Now consider the relationship between the price level and the quantity of money that people demand. The lower the price level, the money the typical transaction requires, and the money people will wish to hold in the form of currency or demand deposits. Assume...
Find the consumers' surplus and the producers' surplus at the equilibrium price level for the given price-demand and price-supply equations. Include a graph that identifies the consumers' surplus and the producers' surplus. Round all values to the nearest integer. p=D(x) = 70 -0.07%; p = S(x) = 30 e 0.001x What is the consumers' surplus, CS? CS = (Round to the nearest integer as needed. Round all intermediate steps to the nearest integer.) What is the producers' surplus, PS? PS...
Open-market sales by the Fed a. make the price level and value of money fall. b. make the price level rise, and make the value of money fall. c. make the price level and make the value of money rise. d. make the price level fall, and make the value of money rise.
Consumer's Surplus A consumer has the utility function U(, y)v) where is the good in concern ail y is the money that can be spent on all other goods (so the price of y is normalized to be 1). The income of - this consumer is 100. Bi Pr X10 (In(x)y) (10%) Derive the demand function of z for this consumer. (10%) Calculate the price elasticity of the demand function in (b) Is it true that the absolute value of...