Multiple Choice
Blake eats two bags of potato chips. If his willingness to pay for the first bag is \$3 and for the second bag is \$2, and the market price per bag is \$2, what is Blake's total consumer surplus from buying two bags?
36
views
5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Consumer expectations are a determinant of which of the following?
A
willingness to pay
B
supply
C
demand
D
consumer surplus
Verified step by step guidance1
Step 1: Understand the concept of consumer expectations. Consumer expectations refer to what consumers anticipate about future prices, income, or product availability, which can influence their current purchasing decisions.
Step 2: Recall the determinants of demand. Demand is influenced by factors such as consumer income, tastes and preferences, prices of related goods, consumer expectations, and the number of buyers.
Step 3: Analyze how consumer expectations affect demand. If consumers expect prices to rise in the future, they may increase their current demand to avoid higher costs later, shifting the demand curve to the right.
Step 4: Differentiate between demand and supply. Supply is determined by factors like production costs, technology, and seller expectations, but consumer expectations specifically affect demand, not supply.
Step 5: Conclude that consumer expectations are a determinant of demand, as they influence consumers' willingness to buy now versus later, thereby affecting the quantity demanded at current prices.
14:41mWatch next
Master Consumer Surplus in a Small Setting with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Consumer Surplus and Willingness to Pay practice set
Problem sets built by lead tutorsExpert video explanations