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1) Consider the following supply equation:
q = -125 + 5p
Suppose the market price is p* = 50, What is the producer surplus?
A) $1,562.50
B) $9,375.50
C) $15,625.50
D) $4,687.50
2) due to marijuana's legalization, Mary Jane Potter decides to open up a marijuana shop. She willing to sell a gram for a minimum price of $5.00 Her producer surplus, once she sells a gram of marijuana, is $15.00. what is the market price of marijuana, per gram?
A) $10.00
B) $15.00
C) $5.00
D) $20.00
3) Uber uses a 'surge pricing' model. The price of an Uber ride increase when it is rush hour, there is a special event, or when bad weather occurs. Using a supply and demand diagram or diagrams, explain how surge pricing works.
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