Chapter 14 1
Subject:EconomicsPrice: Bought3
Chapter 14 1. In Problem 1, Sir Plus has a demand function for mead that is given by the equation D(p) = 100 – p. If the price of mead is $85, how much is Sir Plus’s net consumer’s surplus? a. 112.50 b. 15 c. 225 d. 56.25 e. 7,650 2. Ms. Quasimodo in Problem 3 has the utility function U(x, m) , where x is her consumption of earplugs and m is money left over to spend on other stuff. If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $85, then her net consumer’s surplus a. falls by 1,137.50. b. falls by 3,137.50. c.
