Ap Macro Essay

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R93 Q1 1. Determine the amount of consumer surplus generated in each of the following situations. a. Leon goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. When he is paying for it, he learns that the T-shirt has been discounted by 50%. Leon’s consumer surplus is $5. If we subtract $5, the amount of money he pays, from $10, the amount of money he is willing to pay, $5 remains. b. Alberto goes to the CD store hoping to find a used copy of Nirvana’s Greatest Hits for up to $10. The store has one copy selling for $10, which he purchases. Alberto’s consumer surplus is $0. If we subtract $10, the amount of money he pays, from $10, the amount of money he is willing to pay, $0 remains. c. After soccer practice, Stacey is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 per bottle, so she declines to purchase it. Because Stacey didn’t buy the mineral water, no consumer surplus is created; the amount of money Stacey is willing to pay is less than the real price. Charles Lee Per.6 R100 Q3 3. There are six potential consumers of computer games, each willing to buy only one game. Consumer I is willing to pay $40 for a computer game, consumer 2 is willing to pay $35, consumer 3 is willing to pay

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