Homework Answers
Option A. Decreases
Explanation: Consumer surplus is the area between the demand curve and the price line. When the income decreases, the demand curve shifts left. So, the area representing consumer surplus also declines.
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Why the consumer surplus may increase or remain unchanged? 27. Suppose televisions are a normal good and buyers of t...
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Sandyʹs current consumer surplus for candy is 20. Candy is a normal good for her. When her income increases and the price of candy remains unchanged, her consumer surplus will A) increase. B) decrease. C) remain the same. D) Not enough information.
Suppose that for a perfectly competitive market the initial demand curve is given by the equation...
Suppose that for a perfectly competitive market the initial demand curve is given by the equation P = 10 − Q and the supply curve is given by the equation P = 2 + Q. Now, suppose that the only change to this market is that the number of buyers increases, giving rise to a new demand curve that has the same slope as the initial demand curve. (Everything else remains the same.) Then (A) consumer surplus (unambiguously) increases. (B)...
As a result of a decrease in price, a new buyers enter the market, decreasing consumer...
As a result of a decrease in price, a new buyers enter the market, decreasing consumer surplus. b. existing buyers exit the market, decreasing consumer surplus. c. new buyers enter the market, increasing consumer surplus. d. existing buyers exit the market, increasing consumer surplus.
The difference between an “inferior” good and a “normal” good in Economics is: a. The demand...
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In the market for televisions, the price of a television falls and nothing else changes. Price...
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For a normal good, an increase in consumer income will cause the market demand for the...
For a normal good, an increase in consumer income will cause the market demand for the product to: decrease, which is a shift to the left of the demand curve. decrease, which is a shift to the right of the demand curve. increase, which is a shift to the right of the demand curve. increase, which is a shift to the left of the demand curve. Producer surplus is the: amount by which the quantity supplied of a good exceeds...
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1. The maximum price that a buyer will pay for a good is called a. consumer...
1. The maximum price that a buyer will pay for a good is called a. consumer surplus. b. willingness to pay. c. equilibrium. d. efficiency. B. When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy, a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus increases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in...
As a result of a decrease in price, a new buyers enter the market, decreasing consumer surplus. b. existing buyers exit the market, decreasing consumer surplus. c. new buyers enter the market, increasing consumer surplus. d. existing buyers exit the market, increasing consumer surplus.
33. A product that has a negative income elasticity of demand is a. a complement good. b. a normal good. c. a substitute good d. an inferior good. Suppose the Chicago Enforcers football team increases ticket prices by 10 percent and as a result the quantity of tickets demanded decreases by 7 percent. This response means that the demand for Enforcers tickets is a. unit clastic. b. elastic c. perfectly elastic. d. inelastic. 34. 35. When a market reaches allocative...
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