eco101 topic quiz surplus q_a

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Economics

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Feb 20, 2024

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Assume quantities must be integers. The following table shows a firm's supply function assuming there is neither a tax nor a subsidy. P Q s $110 101 $119 102 $126 103 $140 104 If the government implements a $5 per-unit subsidy, payable to the buyer , what is the marginal cost of the unit number 102? Round to two decimal places and do not enter a currency symbol. If your answer is $1.125, enter 1.13. You Answered Correct Answer 119 The supply schedule gives marginal cost. That is, the marginal cost of the unit 101 is the price at which 101 units is supplied. A tax payable by the seller increases the marginal cost by an amount equal to the tax, whereas a subsidy paid to the seller decreases the marginal cost by an amount equal to the subsidy. Neither a tax payable by the buyer nor a subsidy payable to the buyer affects the marginal cost incurred by the seller.

Assume assumption BIG holds. Prof. Gazzale is selling one quiz drop for $21. It costs Prof. Gazzale $13 to record and process a quiz drop. Suchi is willing to pay up to $34 for the quiz drop, and Ishrak is willing to pay up to to $42. If the quiz drop is eﬃciently allocated, how much surplus is created? Round to two digits, and do not enter the currency symbol. If your answer is -$1.275, enter -1.28. You Answered Correct Answer 29 If eﬃciently allocated, it goes to whomever has the highest WTP. Surplus is thus that person's WTP minus MC. Prof. G. is selling a quiz drop for a good cause! He incurs a time cost of $19.00 to record and process a quiz drop. Each of two student submits a bid, the amount of money the student will pay if awarded the quiz drop. The student submitting the highest bid receives the quiz drop and sends this amount to Indspire, a charity helping Indigenous students in Canada complete their university education. In addition, Prof. G. will send $38.00 to Indspire. Suchi, who would pay up to $57 for an extra quiz drop, bids $43.50. Ishrak, who would pay up to $70 for an extra quiz drop, bids $45.00. If these are the only two bidders, how much surplus has been created?

Round your answer to two decimal places, and do not enter the currency symbol. If your answer is -$1.275, enter -1.28. You Answered Correct Answer 51 Value of a quiz drop to the person submitting the higher bid minus the cost Prof. Gazzale incurs to record and process the quiz drop. The cortado, with equal parts espresso and steamed milk, is truly coffee nirvana. In LA, those served at Menotti's are consistently among the city's best. The following table show's Prof. Gazzale's weekly demand when he lived nearby. P Q d $9 1 $7.4 2 $6 3 $4.6 4 $4.3 5 $3.9 6 $3.4 7 $2.1 8 $1.5 9 $1 10 Assuming one cannot purchase partial cortados, by how much does his consumer surplus change if the per-cortado price is $4.1 rather than $6.2?

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Round to two decimal places, do not enter the currency symbol for the Canadian dollar, and do not forget the negative sign if applicable. If your answer is -$1.125, enter -1.13. You Answered Correct Answer 6.8 ● We can interpret the price column of the demand schedule as an ordering, from lowest to highest, of MWTP. ● Items purchased are any item where P≤MWTP. ● Surplus=MWTP-P for any item purchased. Sum across all items sold to get CS. ● Approach 1 ○ Calculate CS at lower price and subtract CS at higher price. ● Approach 2 ○ For any item purchased at higher price, increase in surplus is the decrease in price. ○ New items get purchased at lower price. Add the surplus from these transactions. Boblandia needs a bridge. ● The value of the bridge does not depend on who builds it. ● It will cost Absinthe Industries $100 to build it, and Absinthe tells the government it will build the bridge if the government pays it $130. ● It will cost Zena Inc. $150 to build it and Zena tells the government it will build the bridge if the government pays it $230. Because Zena's owner is King Bob’s cousin, Zena wins the contract, builds the bridge, and the government pays it $230. By how much would surplus change if Absinthe built the bridge instead?

Round to two digits, do not enter a currency symbol, and enter a negative number of surplus would decrease. For example, if surplus decreases by $1.125, enter -1.13. You Answered Correct Answer 50 Total surplus equals the benefit of the bridge minus its cost of production. Therefore, the change in surplus is Zena’s cost minus Absinthe’s cost. (In terms of benefits, it does not matter which firm builds the bridge.) That is, if Absinthe builds the bridge instead of Zena, we save Zena's cost (which increases surplus), but incur Absinthe's cost (which decreases surplus.) And yes, I know you cannot build a bridge for the dollar values in this question. Just think of these as being tens of millions of dollars. Assume a perfectly competitive market where assumption BIG holds, with MWTP(Q)=56–Q and MC(Q)=16+Q. What is the minimum deadweight loss resulting from a price ﬂoor at $33? Round to two decimal places and do not include a currency symbol. If your answer is -$1.275, enter -1.28. Also, you may need to assume that the highest MWTP get the good or that the lowest MC supply the good. Correct!

Correct Answer 0 Question 8 0 / 10 pts NOTE: Your answer should NOT be a negative number. If you think it should be a negative number, take the absolute value. In 2026, there is neither a tax nor a subsidy and the market price is ₴ 1,000. In 2027, after the government introduces a ₴ 140 per-unit tax payable by the buyer, the resulting market price is ₴ 965. What is the incidence on the buyer, in Ukranian hryvnia? Do not enter the currency symbol, and round two decimal places. If your answer is ₴ 1.125, enter 1.13. You Answered Correct Answer 105

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