13. According to the Bureau of Transportation Statistics, due to an increase in demand, the average domestic airline fare increased from $367.17 in the fourth quarter of 2005 to

$381.99 in the first quarter of 2006, an increase of $14.82.

The number of passenger tickets sold in the fourth quarter of 2005 was 178.1 million. Over the same period, the air -

lines’ costs remained roughly the same: the price of jet fuel averaged around $1.85 per gallon in both quarters (Source:

Energy Information Administration), and airline pilots’

salaries remained roughly the same (according to the Bureau of Labor Statistics, they averaged $135,040 per year in 2005).

Can you determine precisely by how much producer surplus has increased as a result of the $14.82 increase in the average fare? If you cannot be precise, can you determine whether it will be less than, or more than, a specific amount?

14. The U.S. Department of Agriculture (USDA) administers the price floor for milk, set at $0.10 per pound of milk.

(The price floor is officially set at $9.90 per hundredweight of milk. One hundredweight is 100 pounds.) At that price, according to data from the USDA, the quantity of milk produced in 2003 by U.S. producers was 170 billion pounds, and the quantity demanded was 169 billion pounds. To support the price of milk at the price floor, the USDA had to buy up 1 billion pounds of milk. The accompanying diagram shows supply and demand curves illustrating the market for milk.