Question

share 150 Demand For #9 to # 17, suppose the global crude oil market is perfectly competitive. Quantity (Q) units are millions of barrels/day and price (P) units are $/barrel. The inverse demand function is: PPQ) = 165 - Q The inverse supply function is: P (Q) = 15+Q/2 The market equilibrium quantity and price are respectively, Q = 100 barrels oil/day and PME $65/barrel. The Demand and Supply are plotted to the right. 100 C Supply p65 50 D 100 Quantity Oil (mill, barrel/day) 10) The y-axis values of the supply curve represent 9) The y-axis values of the demand curve represent the a) inverse demand b) consumers' maximum marginal willingness to pay (MWTP) of consumers c) marginal benefit consumer (using non-equity weighted money measure) d) all of the above 11) Total consumer benefits at the market allocation are represented by area a) C. b) C+D, c) C + D + E, d) D+E 13) Total Consumer surplus at the market allocation is represented by area a) C+D, b), c) C-G d) D 15) Total producer benefits (revenues) are represented by area a) E, b) D+E, C, D + F + G. d) C 17) Total Private surplus is represented by area a) producers' marginal costs (using non-equity weighted money measure) b) producers' minimum marginal willingness to accept (MWTA) for goods. c) inverse supply d) all of the above 12) Total consumer costs (expenditures) at the market allocation are represented by area a) E, b) D+E, c) C. d) F 14) Total producer variable costs are represented by area b) D+E, c) D+F+G, d) C 16) Total producer surplus is represented by area a) E d) E is maximized at a) a) C. b) D. c) C+D. 18) The the market allocation. a) Total Consumer Surplus b) Total Producer Surplus c) Total Private Surplus d) Deadweight Loss b) D c) C+D d) E

Answer 1

x-a) - Answer B - Y-axis represents price which shows maximum Willingness to pay @-10- Answon-B for producers It shows minimum willingness to accept

A-l1- Answer-C – Area CIDAE Consumer surplus + Total total Consumer benefit equals expendition by consumer. 0-12 Answer- ß. DIE 0-13 Answer. B u - Consumer Surplus is crea above and below the demand Curve. the price line e-14 Answer. I, E Ots Answer- & B. DIE 6-16 Answer. B e - Producer Surplus is the area below the price, line and above the supply Curve. - 17 Answer-C. C+D - Private Surplus Consumen & Producer Surplus 0-18 Answer- c
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