Figure 7-6 Refer to Figure 7-6. When the price falls from P2 to P1, producer surplus

Last year, Russell bought 8 pairs of shoes when his income was $42,000. This year, his income is $54,000, and he purchased 6 pairs of shoes. Holding other factors constant and using the midpoint method, it follows that Russell’s income elasticity of demand is about

Suppose the price of gas increases by 20%. Will demand be more elastic if consumers have 3 weeks or 3 years to adjust to this price change?

Figure 5-7 Refer to Figure 5-7. If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from $6 to $7, then sellers’ total revenue would

Suppose a tax is imposed on bananas. In which of the following cases will the tax cause the equilibrium quantity of bananas to shrink by the largest amount?

Nick and Laura sell lemonade on the corner for $2.10 per cup. It costs them $0.10 to make each cup. On a certain day, their producer surplus is $40. How many cups did Nick and Laura sell?

Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300. The deadweight loss from the tax is

Producer surplus directly measures

The reason for an inefficiency in the market for healthcare is because

For a good that is taxed, the area on the relevant supply-and-demand graph that represents government’s tax revenue is