Ghulam Abass posted an Question
September 17, 2021 • 15:36 pm 15 points
  • UGC NET
  • Economics

Andre walks julia’s dog once a day for $50 per week. julia values this service at $60 per week, while the opportunity cost of andre’s time is $30 per week. the

Andre walks julia’s dog once a day for $50 per week. julia values this service at $60 per week, while the opportunity cost of andre’s time is $30 per week. the government places a tax of $35 per week on dog walkers. before the tax, what is the total surplus?

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  • Rucha rajesh shingvekar best-answer

    Answer: $25 Explanation: Consumer surplus is defined as the difference between the price of a good or service and what a consumer is willing to pay for that good or service. Julia's surplus = $60 - $50 = $10 Supplier surplus is defined as the difference between the price of a good or service and the price at which the supplier would be willing to sell his goods or services. Andre's surplus = $50 - $35 = $15 total surplus = Julia's and Andre's surplus = $10 + $15 = $25

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