123 TABLE 5P2 15 Your grandmother likes oldfashioned yard sa

123 TABLE 5P-2 15. Your grandmother likes old-fashioned yard sales and doesn\'t understand why everyone is so excited about eBay. Explain to her why the creation of a market that enables people who doe\'t live in the same town to buy and sell used goods increases toral surplus over the Willingness to sell one unit ($) Seller oseph Juan Kristin Peter yard-sale market. Lo s.a 16. At Zooey\'s elementary school, children are not allowed to trade lunches or components of their lunches with other stadents, Lunchroom monitors watch closely and strictly enforce this policy. Help Zooey make an argument about the inefficlency of this policy to ber principal. [Lo 5.8 Problems and Applications I. Table SP-2 to construct a step Use the information in Table 5P-1 to construct a step graph of the six consumers\' willingmess to pay, LO 5.1 Use the information in T graph of the six sellers\' willingness to sell. [LO 5.11 2. 3. Answer the following questions based on Tables TABLE 5P- SP-3 and 5P-4. ILO 55] a. What is the qaantity demanded at S10? What is b. What is the quantity demanded at $25? What is Based on Table SP-S, calculate coesumer surplus for Buyer Willingness to pay for one unit (S) the quantity supplied at S10? the quantity supplied at $25? each consumer when the price is $17. What is the total consumer surplus at this price? [LO 5.2] Andre TABLE 5P-3 F G H I Willingness to pay for one unit $35 $33 $27 $22 $21 $13 $13 $12 $6 TABLE 5P-4 Seller Wilingness to sell for one unit $4 $9 $12 $14 $15 $21 $23 $30$51 TABLE 5P-5 A B C D E F GH I Willingness to pay for one unit $6 $27 $13 $21 $33 $35 $12 $13 $22

Solution

Question 3

(a)

An individual consumer will demand a commodity till his maximum willingness to pay is greater than or equal to price of the commodity.

Table 5P-3 shows that if price of a good is $10 then maximum willingness to pay of buyer A, B, C, D, E, F, G, and H is greater than $10.

Thus, the quantity demanded at $10 is 8 units.

An individual seller will supply a commodity till his minimum willingness to sell is equal or lower than the price of the commodity.

Table 5P-4 shows that if the price of good is $10 then minimum willingness to sell of the seller A and B is lower than the $10.

Thus, the quantity supplied at $10 is 2 units.

(b)

An individual consumer will demand a commodity till his maximum willingness to pay is greater than or equal to price of the commodity.

Table 5P-3 shows that if price of a good is $25 then maximum willingness to pay of buyer A, B, C, D is greater than $25.

Thus, the quantity demanded at $25 is 4 units.

An individual seller will supply a commodity till his minimum willingness to sell is equal or lower than the price of the commodity.

Table 5P-4 shows that if the price of good is $25 then minimum willingness to sell of the seller A, B, C, D, E, F, and G is lower than the $25.

Thus, the quantity supplied at $25 is 7 units.