Answer Happy

1. Ch. 7 Problems and Applications Q4 It is a hot day, and Dmitri is thirsty. Here is the value he places on a bottle of water: Value of first bottle: $9 Value of second bottle: $7 Value of third bottle: $4 Value of fourth bottle: $1 From this information, complete the following table by deriving Dmitri's demand schedule. Price Quantity Demanded More than $9 $7.01 to $9 $4.01 to $7 $1.01 to $4 $1 or fewer Based on Dmitri's willingness to pay, plot Dmitri's demand curve as a step function on the following graph using blue points (circle symbol) beginning at a quantity of 0 bottles of water. (?) 10 9 Dmitri's Demand 8 7 Price = $6 * Quantity Purchased. Consumer Surplus Price of Water 1 0 0 1 Quantity of Water
Suppose the price of a bottle of water is $6. Use the black line (plus symbol) to draw a price line at $6. Next use the grey point (star symbol) to indicate how many bottles of water Dmitri will buy at that price. Finally, use the green point (triangle symbol) to shade the area that represents Dmitri's consumer surplus from his purchases. In this case, Dmitri receives $ in consumer surplus from his water purchase. bottles of water. This his consumer If the price falls to $3, Dmitri now buys surplus to $
Use the black line (plus symbol) to draw a price line at $6. Next use the grey point (star symbol) to indicate how many bottles of water Dmitri will buy at that price. Finally, use the green point (triangle symbol) to shade the area that represents Dmitri's consumer surplus from his purchases. decreases In this case, Dmitri receives in consumer surplus from his w se. increases If the price falls to $3, Dmitri now buys bottles of water. This his consumer surplus to $