Refer to Figure 4-7. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What has happened to the consumers' surplus as a result of the imposition of the price floor? consumers' surplus has gone down by (area 2 + 4) consumers' surplus has risen by (area 2 + 4) consumers' surplus has gone down by (area 3 - area 5) consumers' surplus has risen by (area 2 + 3)
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Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay. It is represented by the area under the demand curve and above the price level. Show more…
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Assume that in order to help hay farmers, the government imposes a price floor on hay of $14 per bale and that the price floor stays in place for the long run. Use the graph below to show the price floor, then answer the questions. What is the surplus from this long-run price floor? Hay Market Supply (long-run) thousand bales Price floor Tools x 10^2 In the long run, the surplus caused by a price floor on hay is likely to increase because the demand curve will become more inelastic. increase because farmers will increase the amount of land used to grow hay. Demand (long-run) decrease because farmers will devote more of their land to other crops. Quantity in thousands of bales decrease because the demand curve will become more inelastic.
Crystal W.
Figure 4-6 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. 25) Refer to Figure 4-6. What area represents consumer surplus after the imposition of the price floor? A) A + B + E B) A + B C) A + B + E + F D) A 26) Refer to Figure 4-6. What is the area that represents producer surplus after the imposition of the price floor? A) A + B + E B) B + E C) B + E + F D) B + C + D + E 27) Refer to Figure 4-6. What area represents consumer surplus at equilibrium? A) A + B + C + D + E B) A C) A + B + C D) A + B + E E) A + B + E + F 28) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor? A) B B) B + C C) B + E D) E 29) Refer to Figure 4-6. What area represents the deadweight loss after the imposition of the price floor? A) C + D + G B) F + G C) C + D D) C + D + F + G 30) Refer to Figure 4-6. What area represents consumer total benefit after the imposition of the price floor? A) A + B + C + D + E B) A + B + E + F C) A + B + C + D + E + F + G D) A + B + E E) B + C + E + D 31) Refer to Figure 4-6. What area represents consumer total cost after the imposition of the price floor? A) A + B + C + D + E B) A + B + E + F C) A + B + C + D + E + F + G D) B + E + F E) B + C + E + D 32) Refer to Figure 4-6. What area represents producer total benefit after the imposition of the price floor? A) A + B + C + D + E B) A + B + E + F C) A + B + C + D + E + F + G D) B + E + F E) B + C + E + D 33) Refer to Figure 4-6. What area represents the deadweight loss after the imposition of the price floor if the government decided to purchase and discard the surplus? A) C + D + G B) F + G C) C + D D) C + D + F + G E) C + D + F + G + J
Akash M.
Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Price/unit Figure 4.6 6) In figure 4.6 at equilibrium, consumer surplus is area A) A. B) G. C) E+F+G. D) A+B+C. 7) In figure 4.6 at equilibrium, producer surplus is area A) A+B+C. B) E+F+G. C) G. D) A. 8) In figure 4.6 if price is P1, consumer surplus is area A) A. B) B+C+E+F+G. C) G. D) A+B+E. 9) In figure 4.6 if price is P1, producer surplus is area A) B+E+G. B) A+B+E. C) G. D) A. 10) In figure 4.6 if price is P1, the deadweight loss due to under production is area A) F+G. B) A+C. C) E+G. D) C+F.
Andrew D.
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