The following table of consumer's reservation prices for apartments are given:
Person = A B C D E F G H
Price = 40 25 30 35 10 18 15 5
Answer the following questions:
a) If the equilibrium rent for an apartment is $20, which consumers will get the apartment?
b) If the equilibrium rent for an apartment is $20, what is consumer A's net surplus and consumer B's net surplus?
c) If the equilibrium rent for an apartment is $20, what is the total net consumers' surplus?
d) If the equilibrium rent for an apartment is $20, what is the total gross consumers' surplus?
e) If the rent declines to $19, by how much does the gross surplus increase?
f) If the rent declines to $19, by how much does the net surplus increase
The following table of consumer's reservation prices for apartments are given:
Person = A B C D E F G H
Price = 40 25 30 35 10 18 15 5
Answer the following questions:
a) If the equilibrium rent for an apartment is $20, which consumers will get the apartment?
b) If the equilibrium rent for an apartment is $20, what is consumer A's net surplus and consumer B's net surplus?
c) If the equilibrium rent for an apartment is $20, what is the total net consumers' surplus?
d) If the equilibrium rent for an apartment is $20, what is the total gross consumers' surplus?
e) If the rent declines to $19, by how much does the gross surplus increase?
f) If the rent declines to $19, by how much does the net surplus increase
Related textbook solutions
Related questions
1. Which of the following statements is true of marginal analysis?
A. Marginal analysis is a tool used in optimization in levels.
B. Marginal analysis involves the calculation of the total net benefits of all the available alternatives.
C. Marginal analysis compares the consequences of doing one more step of something.
D. Marginal analysis of alternatives will mostly give an outcome different from optimization in levels.
2. Ryan wants to rent an apartment. The following table shows the monthly rent of five apartments and the monthly commuting time to work from each apartment. Ryan's opportunity cost of time is $15 per hour.
|
Apartment |
Commuting Time(hours/month) |
Rent ($/month) |
|
1 |
40 |
1,500 |
|
2 |
20 |
1,750 |
|
3 |
10 |
2,000 |
|
4 |
4 |
2,210 |
|
5 |
1 |
2,250 |
Refer to the table above. What is the opportunity cost of commute per month to work if Ryan rents apartment 2?
A. $150
B. $300
C. $20
D. $200
3. Which of the following statements identifies a difference between optimization in levels and optimization in differences?
A. Optimization in levels calculates the change in net benefits when switching from one alternative to another, whereas optimization in differences calculates the net benefits of different alternatives.
B. Optimization in levels compares only the benefits from different alternatives, whereas optimization in differences compares only the costs of different alternatives.
C. Optimization in levels compares only the costs of different alternatives, whereas optimization in differences compares only the benefits of different alternatives.
D. Optimization in levels calculates the net benefits of different alternatives, whereas optimization in differences calculates the change in net benefits when switching from one alternative to another.
