Consumer and producer surplus: Practice Questions

In the market for a normal good, what will be the effect on consumer surplus if the market supply curve shifts to the right while the demand curve remains unchanged?

A consumer is willing to pay \(\$50\) for the first unit of a good, \(\$40\) for the second, and \(\$30\) for the third. If the market price is currently \(\$35\) per unit, what is the total consumer surplus gained by this consumer if they act rationally?

If a rightward shift in the supply curve occurs for a good with unit price elasticity of demand throughout its length, which statement about producer surplus is correct?

In the market for a normal good, which change would lead to a certain increase in consumer surplus, assuming the supply curve remains unchanged?

In the market for luxury watches, the equilibrium price is \(\$5,000\). A consumer is willing to pay up to \(\$6,200\) for a specific model, while the manufacturer is willing to sell it for a minimum of \(\$3,800\). Calculate the total surplus generated from this transaction and identify the individual values for both consumer surplus and producer surplus.

In a market with a perfectly elastic supply curve, the government imposes a minimum price (price floor) above the equilibrium level. Explain the resulting impact on consumer surplus and producer surplus, identifying which party captures the deadweight loss.