1. You are willing to pay $2,000 to have your house painted, and Pablos marginal cost of painting a house is $1,400. If you agree to split the difference, the price is ______, your consumer surplus is ______, and Pablo€™s producer surplus is ______.
2. In Figure, Forest is willing to pay ______for the fourth cut lawn, and Dee s marginal cost is ______. If they split the difference, the price would be ______and each would get a surplus of ______.

3. In Figure a maximum price of $4 prevents mutually beneficial transactions between Thurl and ______and between Forest and ______.

4. Fill in the blanks with consumers or producers: A maximum price below the equilibrium price generates benefits for some ______and imposes costs on some ______and some______.
5. Fill in the blanks with consumers or producers: A minimum price above the equilibrium price generates benefits for some ______and imposes costs on some ______and some ______.
6. In Figure (a) the sixth lawn is not cut because the ______of the sixth consumer (Siggy, in Figure (b)) is______ the ______of the sixth producer (Efrin, in Figure c).

7. Identify the Surpluses. The following graph shows a supply curve and a demand curve and several areas between the curves. Identify the areas on the figure that represent the following:
a. Consumer surplus in the market equilibrium
b. Producer surplus in the market equilibrium
c. Total surplus in the market equilibrium
d. Consumer surplus under a maximum price of $10
e. Producer surplus under a maximum price of $10
f. Total surplus under a maximum price of $10
g. Consumer surplus under a maximum quantity of 70
h. Producer surplus under a maximum quantity of 70
i. Total surplus under a maximum quantity of70

Transcribed Image Text:

Juan Tupak 19 Thurl Forest Supply 13 Fivola E 10 Price Eve Dec 6 Demand 4 Bea Abe 0 Number of lawns cut per hour $25 $25 uan Juan Minimun price Tupak 19 Thurl Thurl Forest Forest Supply Supply Dee Dee Demand Cecil Bea Maximum price Abe Abe Number of lawns cut per hour (B) Minimum Price (Price Floor) Number of lawns cut per hour (A) Maximum Price (Price Ceiling) $25 Juan Tupak 19 Thurl 16 Forest Supply 13 Fivola 10 Eve Dee Demand ect Bea Abe Number of lawns cut per hour l6 10 Siggy Number of lawns cut pet hout S1 4 12 Namber of kawns cut per hour