Use the supply curve represented in Figure 5P-3 to draw the producer surplus when the market price is $\$ 5$. What is the value of producer surplus at this price?

Which of the following is an example of market failure? A. Most people can't buy as many pairs of shoes as they would like. B. Most stores can't sell as much merchandise as they would like. C. Fishing in many waterways brings the quantity of fish below its socially optimal level. D. People typically pay more for a good than they would like to pay. E. Scores typically must charge a price that is less than they would like to charge

Consider the market represented in Figure 5P-7.

b. Draw the consumer surplus and the producer surplus if the price is $\$ 30$.

What are the values of consumer surplus, producer surplus, and total surplus at this price?

Consider the market represented in Figure 5P-7.

a. Draw the consumer surplus and the producer surplus at the equilibrium price and quantity.

What is the value of total surplus at equilibrium?

Total surplus is maximized at the equilibrium price and quantity. When demand increases, price increases. Explain how total surplus is still maximized if price increases due to an increase in demand.

Bill is a professional photographer. His camera is broken and he needs a new one within the next hour, or he will miss an important deadline. Lisa is a high-school student who doesn't have a camera but wants to get one to take pictures at her prom next month. Who do you think would have a higher willingness to pay for a particular camera today? Why?

You sell T-shirts at your school's football games. Each shirt costs $5 to make and sells for$10. Each game lasts two hours and you sell 100 shirts per game. You could always be earning $8 per hour at your other job. Which of the following is correct? Your accounting profit from selling shirts at a game is A.$1,000 and your economic profit is $500. B.$500 and your economic profit is $1,000. C.$500 and your economic profit is $484. D.$484 and your economic profit is $500. E.$500 and your economic profit is also $500.

Sunny owns and operates Sunny's Sno Cone Stand. Use the data in the table provided to answer the questions below.

$$\begin{array} { l l } { \text { Sunny's Sno Cone Stand: January } } \\ { \text { Price of Sno Cone } } & { \$ 2 } \\ { \text { Sno Cones sold } } & { 2,000 } \\ { \text { Explicit cost } } & { \$ 400 } \\ { \text { Depreciation } } & { \$ 100 } \\ { \text { Implicit cost of capital } } & { \$ 200 } \end{array}$$

Calculate Sunny's Sno Cone Stand's total revenue for January.

Which of the following is considered when calculating economic profit but not accounting profit? A. implicit cost B. explicit cost C. total revenue D. marginal cost E. All of the above are considered when calculating accounting profit.

Which of the following is the best definition of accounting profit? Accounting profit equals total revenue minus depreciation and total A. explicit cost only. B. implicit cost only. C. explicit cost plus implicit cost. D. opportunity cost. E. explicit cost plus opportunity cost

Which of the following is an example of an implicit cost of going out for lunch? A. the amount of the tip you leave the waiter B. the total bill you charge to your credit card C. the cost of gas to drive to the restaurant D. the value of the time you spent eating lunch E. all of the above

Suppose you are in business earning an accounting profit of $25,000. What is your economic profit if the implicit cost of your capital is$2,000 and the opportunity cost of your time is $23,000? Explain your answer.

Use the information in Table $5 \mathrm{P}-1$ to construct a step graph of the six consumers' willingness to pay. |Buyer |Willingness to pay for one unit ($)

The market shown in Figure 6P-6 is in equilibrium. Suppose there is a $\$ 1.50$ per unit tax levied on sellers.

b. Plot the after-tax price paid by consumers and the after-tax price paid by sellers.