Seminar 4

By Le Thanh Ha
Type I: Discussion questions
Table 7-1

Buyer Willingness To Pay

Mike $50.00

Sandy $30.00

Jonathan $20.00

Haley $10.00
1. Refer to Table 7-1. If the price of the product is $15, then who would be willing to purchase the product?
a. Mike

b. Mike and Sandy

c. Mike, Sandy, and Jonathan

d. Mike, Sandy, Jonathan, and Haley

2. Refer to Table 7-1. If the price of the product is $22, then who would be willing to purchase the product?
a. Mike

b. Mike and Sandy

c. Mike, Sandy, and Jonathan

d. Mike, Sandy, Jonathan, and Haley

3. Refer to Table 7-1. If the price of the product is $18, then the total consumer surplus is
a. $38.

b. $42.

c. $46.

d. $72.

For each of three potential buyers of oranges, the table displays the willingness to pay for the first three
oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three
oranges can be supplied per day.

First Orange Second Orange Third Orange

Alex $2.00 $1.50 $0.75

Barb $1.50 $1.00 $0.80

Carlos $0.75 $0.25 $0

4. Refer to Table 7-5. If the market price of an orange is $1.20, the market quantity of oranges demanded
per day is

a. 1.

b. 2.

c. 3.

d. 4.
5. Refer to Table 7-5. If the market price of an orange is $0.70, the market quantity of oranges demanded
per day is

a. 5.

b. 6.

c. 7.

d. 9.

6. Refer to Table 7-5. If the market price of an orange is $1.20, consumer surplus amounts to
a. $0.70.

b. $1.10.

c. $1.40.

d. $5.00.

7. Refer to Table 7-5. If the market price of an orange is $0.40,

a. 6 oranges are demanded per day, and total consumer surplus amounts to $4.45.

b. 6 oranges are demanded per day, and total consumer surplus amounts to $5.10.

c. 7 oranges are demanded per day, and total consumer surplus amounts to $5.35.

d. 7 oranges are demanded per day, and total consumer surplus amounts to $5.50.

8. A drought in California destroys many red grapes. As a result of the drought, the consumer surplus in the
market for red grapes

a. increases, and the consumer surplus in the market for red wine increases.

b. increases, and the consumer surplus in the market for red wine decreases.

c. decreases, and the consumer surplus in the market for red wine increases.

d. decreases, and the consumer surplus in the market for red wine decreases.

9. Chad is willing to pay $5.00 to get his first cup of morning latté. He buys a cup from a vendor selling latté
for $3.75 per cup. Chad's consumer surplus is

a. $8.75.

b. $5.00.

c. $3.75.

d. $1.25.