Chapter 4 InQulzitiva: Cheptor 4: Market Outcomes and Tax Incidence e Page(s) 11

Question

Chapter 4 InQulzitiva: Cheptor 4: Market Outcomes and Tax Incidence e Page(s) 116-117 Select the two situations with the highest total surplus. Correct Answer(s) Jay buys a house for $40,000 less than he was willing to pay. He bought his home from sellers who received $2,000 more than they were willing to sell for. Don wanted to buy a scooter for no more than $5, but was only able to find a producer who would sell for $15. Bonnie buys flowers for $2.25 less than she was willing to pay. She bought them from a seller would have been willing to receive $3 less from the sale. Kevin wanted to spend $50 on a dishwasher and bought one at $45 from a producer who was hoping to receive $40 Incorrect Answer(s)

Explanation / Answer

situation 1 and 4th are the case with the highest total surplus. in the situation 1 consumer pays $40000 less than of his will so their surplus in increases here and producer also received $2000 more than his expectations so producer surplus in also increases here. similar to the case in situation 4.

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