ECON1110 Revised: May 2021 Page 1
CHAPTER 5
Problems
1. What is the maximum that consumers are willing to pay for the two hundredth latte?
2. What is the marginal benefit of the four hundredth latte?
3. What is the consumer surplus derived from consuming the four hundredth latte?
4. What is the minimum amount the sellers of lattes must receive in order to supply the two
hundredth latte?
5. What is the marginal cost of the four hundredth latte?
6. What is the producer surplus derived from supplying the four hundredth latte?
7. What would be the allocatively efficient quantity level be (lattes per day)? Briefly explain.
8. What would be the maximum total amount of producer and consumer surplus in the latte
market?
9. If the government fixed the weekly quantity level at 10,000 lattes per day, what would be
the total amount of deadweight loss?
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Price per Latte ($)
Lattes (hundreds)
Lattes
