2. Individual demand and consumer surplus Consider the market for yachts. The market price of each yacht is $350,000, and each buyer demands no more than one yacht. Suppose that Nick is the only...

True or false: keeping his maximum willingness to pay for a yacht in mind, Tim will buy the yacht because it will be worth more to him than its market price of $350,000

Extracted text: 2. Individual demand and consumer surplus Consider the market for yachts. The market price of each yacht is $350,000, and each buyer demands no more than one yacht. Suppose that Nick is the only consumer in the yacht market. His willingness to pay for a yacht is $560,000. Based on Nick's willingness to pay, the following graph shows his demand curve for yachts. Shade the area representing Nick's consumer surplus using the green rectangle (triangle symbols). Nick's Demand 560 490 Nick's Consumer Surplus 420 Market Price 350 280 210 140 70 4 QUANTITY (Yachts) PRICE (Thousands of dollars)


Extracted text: Now, suppose another buyer, Rosa, enters the market for yachts, and her willingness to pay is $490,000. Based on Rosa's and Nick's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Nick's consumer surplus using the green rectangle (triangle symbols), and shade Rosa's consumer surplus using the purple rectangle (diamond symbols). Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically. 560 490 Demand Curve 420 Market Price 350 Nick's Consumer Surplus 280 210 Rosa's Consumer Surplus 140 70 3 4. QUANTITY (Yachts) PRICE (Thousands of dollars)