1) Suppose that Michelle buys a cappuccino from Paul\'s Cafe and Bakery for $6.25. Michelle was willing to pay up to $8.75 for the cappuccino and Paul\'s Cafe and Bakery was willing to accept $2.25 for the cappuccino. Based on this information, answer the questions below.
a) Michelle\'s consumer surplus is equal to?
b) Paul\'s Bakery\'s producer surplus is equal to?
2) Producer surplus is the difference between?
a) the maximum price a buyer is willing to pay and the market pric
b) the market price and the minimum price a buyer is willing to pay.
c) the maximum price a seller is willing to accept and the market price.
d) the market price and the minimum price a seller is willing to accept.
3) Producer surplus is shown graphically as the area:
a) under the demand curve and above the market price.
b) under the demand curve and below the market price.
c) above the supply curve and below the market price.
d) above the supply curve and above the market price