Graded Homework-Chanter 10 7 Graded Homework- Chapter 8 producer surplus. consum

Question

Graded Homework-Chanter 10 7 Graded Homework- Chapter 8 producer surplus. consumer surplus. : marginal utility. prod, at Score: 0 of 1 05,suppose that consumer demand is given by this equation: P = 10- Q. What is the value of consumer surplus when P = 5? $50 $12.50 3 $25 $5 Score: 0 of 1 6. Suppose that the free-trade price of a ton of steel is 500. (Note: is the symbol for the euro, a common currency used in 19 European countries, including Finland.) Finland, a small country, imposes a 60 per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000 tons of steel and consumes 600,000 tons of steel.

Explanation / Answer

5. The demand equation is

    P = 10 - Q

    Q = 10 - P

At P = 5

    Q = 10 - 5 = 5

Consumer surplus = 0.5[(10 - 5) * 5] = $12.50

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