Exhibit 6-18 On a normal day, Emily Mapai's demand curve for a cup of hot chocolate is initially shown as D in Exhibit 6-18.On a day when the high temperature does not get above zero degrees, her demand curve increases to D'.At a price P for a cup of hot chocolate, Emily's consumer surplus on a freezing day
A)cannot be determined without calculating an exact marginal valuation
B)increases a great deal over her consumer surplus on a normal day
C)will vary depending on whether hot chocolate is a normal or an inferior good
D)increases only if her demand curve is unit-elastic
E)decreases a great deal over her consumer surplus on a normal day

Question

Exhibit 6-18  On a normal day, Emily Mapai's demand curve for a cup of hot chocolate is initially shown as D in Exhibit 6-18.On a day when the high temperature does not get above zero degrees, her demand curve increases to D'.At a price P for a cup of hot chocolate, Emily's consumer surplus on a freezing day
A)cannot be determined without calculating an exact marginal valuation 
B)increases a great deal over her consumer surplus on a normal day 
C)will vary depending on whether hot chocolate is a normal or an inferior good 
D)increases only if her demand curve is unit-elastic 
E)decreases a great deal over her consumer surplus on a normal day

Quizplus · Accepted Answer

When the temperature is extremely low, the demand for a cup of hot chocolate increases, which results in an increase in consumer surplus. Therefore, Emily's consumer surplus on a freezing day increases a great deal over her consumer surplus on a normal day.

Exhibit 6-18 on a Normal Day, Emily Mapai's Demand