Circle the letter of the one answer that you think is correct or closest to corr
ID: 2441701 • Letter: C
Question
Circle the letter of the one answer that you think is correct or closest to correct Use the following to answer questions: Table: Consumer Surplus and Phantom Tickets Student Jessica Jacquelyn Brad Robert Gwen s to $150 125 105 60 25 1. (Table: Consumer Surplus and Phantom Tickets) The table Consumer Surplus and Phantom Tickets shows each student's willingness to pay for a Phantom of the Opera ticket. Assume that each student wants to buy one ticket. If the box office price of a ticket to see Phantom of the Opera is $130 and there is no other market for tickets, the total consumer surplus for the five students is: B) $125 C) $20 D) SO We can measure total consumer surplus for good X as: A) the sum ofthe individual consumer surpluses for all buyers of X. B) the area above the demand curve for X and below the price of X. C) the area bounded by the demand curve for X and the two axes. 125 2. ? D) the area above the supply curve for X.Explanation / Answer
(1) (C)
A consumer will buy a good only if their maximum willingness to pay is higher than market price. When market price is $130, only Jessica will buy since her maximum willingness to pay is higher than market price ($150 > $130).
Consumer surplus (CS) = Maximum willingness to pay - Market price = $150 - $130 = $20
(2) (A)
Aggregate CS is the sum of all individual CS and is measured by the area enclosed between the market demand curve and market price.