3. It is a hot day, and Nina is thirsty. Here is the value, in money terms, she places on a bottle of lemonade: Value of first bottle £7 Value of second bottle £5 Value of third bottle £3 Value of fourth bottle £1 (i) From this information, derive Nina’s demand schedule. Graph her demand curve for bottled lemonade. (ii) If the price of a bottle of lemonade is £4, how many bottles does Nina buy? How much consumer surplus does Nina get from her purchases? Show Nina’s consumer surplus on your graph. (iii) If the price falls to £2, how does quantity demanded change? How does Nina’s consumer surplus change? Show these changes on your graph.
3. It is a hot day, and Nina is thirsty. Here is the value, in money terms, she places on a bottle of lemonade: Value of first bottle £7 Value of second bottle £5 Value of third bottle £3 Value of fourth bottle £1 (i) From this information, derive Nina’s demand schedule. Graph her demand curve for bottled lemonade. (ii) If the price of a bottle of lemonade is £4, how many bottles does Nina buy? How much consumer surplus does Nina get from her purchases? Show Nina’s consumer surplus on your graph. (iii) If the price falls to £2, how does quantity demanded change? How does Nina’s consumer surplus change? Show these changes on your graph.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 4CQ
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Question
3. It is a hot day, and Nina is thirsty. Here is the value, in money terms, she places on a bottle of lemonade:
Value of first bottle £7
Value of second bottle £5
Value of third bottle £3
Value of fourth bottle £1
(i) From this information, derive Nina’s demand schedule. Graph her demand curve for bottled lemonade.
(ii) If the price of a bottle of lemonade is £4, how many bottles does Nina buy? How much
(iii) If the price falls to £2, how does quantity demanded change? How does Nina’s consumer surplus change? Show these changes on your graph.
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