1 Question (4 points) A college student enjoys eating jelly beans. Her willingne

Question

1 Question (4 points) A college student enjoys eating jelly beans. Her willingness to pay for each bagis shown in the following table a See page 153 Number of bags Villingness to pay (per bag) $5 $4 $3 $2 $1 1st attempt ? See Hint Part 1 (2 points If a bag of jelly beans costs $2, how many bags will the student buy? bags of jelly beans. How much consumer surplus will she enjoy? Assume that the student will purchase bags up to, but not including, the point at which she incurs a loss of consumer surplus. in consumer surplus. 01/13

Explanation / Answer

Req 1. The students will buy 4 bags at Price $ 2 Consumer surplus is computed as follows: Number Willingness Price Consumer of bags to pay Surplus 1 5 2 3 2 4 2 2 3 3 2 1 4 2 2 0 5 1 2 - 6 0 2 - Consumer Surplus 6 Part2 The students will buy 5 bags at price $1. Consumer surplus is computed as follows: Number Willingness Price Consumer of bags to pay Surplus 1 5 1 4 2 4 1 3 3 3 1 2 4 2 1 1 5 1 1 0 6 0 1 - Consumer Surplus 10

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