question archive It is a hot day, and a man is thirsty
It is a hot day, and a man is thirsty
Subject:EconomicsPrice: Bought3
It is a hot day, and a man is thirsty. He places the following value on each bottle of water.
Value of first bottle = $7
Value of second bottle = $5
Value of third bottle = $3
Value of fourth bottle = $1
a. From this information, derive his demand schedule. Graph his demand curve for bottled water.
b. If the price of a bottle of water is $4, how many bottles does he buy? How much consumer surplus does he get from his purchases? Show his consumer surplus on your graph.
c. If the price falls to $2, how does the quantity demanded change? How does his consumer surplus change? Show these changes on your graph.
