1. The table below describes traffic on a congestible freeway. Plot and label the marginal social cost (MC), average private cost (AC), and demand (D) curves on the provided graphi paper. T refers to the number of cars on the freeway. $7.50 $7.25 $7.00 $6.75 $6.50 56.25 $6.00 $5.75 $5.50 55.25 $5.00 $4.75 54 50 $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 S- 0 T 1 1 2 3 $ S $ S 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 10 $ 11 $ 12 $ 13 $ 14 $ 15 $ 16 $ 17 S 18 $ 19 $ 20 $ 21 $ 22 $ 23 S 24 $ 25 $ MC 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.20 $ 3.40 S 3.60 $ 3.80 $ 4.00 $ 4,20 S 4.40 $ 4.60 $ 4.80 $ 5.00 $ 5.20 $ 5.40 $ 5.60 $ 5.80 $ 6.00 $ 6.20 $ 6.40 $ 6.60 $ 6.80 $ 7.00 $ AC 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.10 $ 3.20 S 3.30 $ 3.40 $ 3.50 $ 3.60 $ 3.70 $ 3.80 $ 3.90 $ 4.00 $ a) What is the equilibrium level of traffic? b) What is the socially optimal level of traffic? c) At what level of traffic does congestion appear? d) What toll would reduce traffic from the equilibrium to the social optimum? 4.10 $ 4.20 $ 4.30 $ 4.40 $ 4.50 $ 4.60 S 4.70 S 4.80 $ 4.90 $ 5.00 $ D 6.50 6.40 6.30 6.20 6.10 6.00 5.90 5.80 5.70 5.60 5.50 5.40 5.30 5.20 5.10 5.00 4.90 4,80 4,70 4.60 4.50 4.40 4.30 4,20 4.10 4.00 Label it Teo on the chart. Label it Topt on the chart. Label it Tear on the chart. 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23
1. The table below describes traffic on a congestible freeway. Plot and label the marginal social cost (MC), average private cost (AC), and demand (D) curves on the provided graphi paper. T refers to the number of cars on the freeway. $7.50 $7.25 $7.00 $6.75 $6.50 56.25 $6.00 $5.75 $5.50 55.25 $5.00 $4.75 54 50 $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 S- 0 T 1 1 2 3 $ S $ S 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 10 $ 11 $ 12 $ 13 $ 14 $ 15 $ 16 $ 17 S 18 $ 19 $ 20 $ 21 $ 22 $ 23 S 24 $ 25 $ MC 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.20 $ 3.40 S 3.60 $ 3.80 $ 4.00 $ 4,20 S 4.40 $ 4.60 $ 4.80 $ 5.00 $ 5.20 $ 5.40 $ 5.60 $ 5.80 $ 6.00 $ 6.20 $ 6.40 $ 6.60 $ 6.80 $ 7.00 $ AC 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.10 $ 3.20 S 3.30 $ 3.40 $ 3.50 $ 3.60 $ 3.70 $ 3.80 $ 3.90 $ 4.00 $ a) What is the equilibrium level of traffic? b) What is the socially optimal level of traffic? c) At what level of traffic does congestion appear? d) What toll would reduce traffic from the equilibrium to the social optimum? 4.10 $ 4.20 $ 4.30 $ 4.40 $ 4.50 $ 4.60 S 4.70 S 4.80 $ 4.90 $ 5.00 $ D 6.50 6.40 6.30 6.20 6.10 6.00 5.90 5.80 5.70 5.60 5.50 5.40 5.30 5.20 5.10 5.00 4.90 4,80 4,70 4.60 4.50 4.40 4.30 4,20 4.10 4.00 Label it Teo on the chart. Label it Topt on the chart. Label it Tear on the chart. 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
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Transcribed Image Text:1. The table below describes traffic on a congestible freeway, Plot and label the marginal
social cost (MC), average private cost (AC), and demand (D) curves on the provided graph
paper. T refers to the number of cars on the freeway.
$7.50
$7.25
$7.00
$6.75
$6.50
56.25
$6.00
55.75
$5.50
55.25
$5.00
$4.75
$4.50
$4.25
$4.00
53.75
$3.50
53.25
$3.00
$2.75
$2.50
$2.25
$2.00
$1.75
$1.50
$1.25
$1.00
50.75
$0.50
$0.25
S
0
T
1
Ś
$
S
3
$
4 $
1
5 $
6 $
7 $
8 $
9 $
10 $
11 $
12 $
13 $
14 $
15 $
16 $
17 $
18 $
19 $
20 $
21 $
22 $
23 $
24 $
25 $
MC
3.00 $
3.00 $
3.00 $
3.00 $
3.00 $
3.00 $
3.20 $
3.40 $
3.60 $
3.80 $
4.00 $
4.20 $
4.40 Ś
4.60 $
4.80 $
5.00 $
5.20 Ś
5.40 $
5.60 $
5.80 $
6.00 $
6.20 $
6.40 $
6.60 $
6.80 $
7.00 $
AC
3.00 $
3.00 $
3.00 Ś
3.00 $
3.00 $
3.00 $
3.10 $
3.20 S
3.30 S
3.40 S
3.50 $
3.60
3.70 $
3.80 $
3.90 $
4.00 $
4.10 S
4.20 $
4.30 $
$
4.50 $
4.60 $
4.70 $
4.80 $
4.90 $
5.00 $
D
6.50
6.40
a) What is the equilibrium level of traffic?
b) What is the socially optimal level of traffic?
c) At what level of traffic does congestion appear?
d) What toll would reduce traffic from the equilibrium to the social optimum?
6.30
6.20
6.10
6.00
5.90
5.80
5.70
5.60
5.50
5.40
5.30
5.20
5.10
5.00
4.90
4.80
4.60
4.50
4.40
4.30
4.20
4.10
4.00
Label it Teg on the chart.
Label it Toot on the chart.
Label it Tear on the chart.
8
10
11
12
13
14
15
16
18
19
20
21
22
Traffic (T)
25
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Transcribed Image Text:1. The table below describes traffic on a congestible freeway, Plot and label the marginal
social cost (MC), average private cost (AC), and demand (D) curves on the provided graph
paper. T refers to the number of cars on the freeway.
$7.50
$7.25
$7.00
$6.75
$6.50
56.25
$6.00
55.75
$5.50
55.25
$5.00
$4.75
$4.50
$4.25
$4.00
53.75
$3.50
53.25
$3.00
$2.75
$2.50
$2.25
$2.00
$1.75
$1.50
$1.25
$1.00
50.75
$0.50
$0.25
S
0
T
1
Ś
$
S
3
$
4 $
1
5 $
6 $
7 $
8 $
9 $
10 $
11 $
12 $
13 $
14 $
15 $
16 $
17 $
18 $
19 $
20 $
21 $
22 $
23 $
24 $
25 $
MC
3.00 $
3.00 $
3.00 $
3.00 $
3.00 $
3.00 $
3.20 $
3.40 $
3.60 $
3.80 $
4.00 $
4.20 $
4.40 Ś
4.60 $
4.80 $
5.00 $
5.20 Ś
5.40 $
5.60 $
5.80 $
6.00 $
6.20 $
6.40 $
6.60 $
6.80 $
7.00 $
AC
3.00 $
3.00 $
3.00 Ś
3.00 $
3.00 $
3.00 $
3.10 $
3.20 S
3.30 S
3.40 S
3.50 $
3.60
3.70 $
3.80 $
3.90 $
4.00 $
4.10 S
4.20 $
4.30 $
$
4.50 $
4.60 $
4.70 $
4.80 $
4.90 $
5.00 $
D
6.50
6.40
a) What is the equilibrium level of traffic?
b) What is the socially optimal level of traffic?
c) At what level of traffic does congestion appear?
d) What toll would reduce traffic from the equilibrium to the social optimum?
6.30
6.20
6.10
6.00
5.90
5.80
5.70
5.60
5.50
5.40
5.30
5.20
5.10
5.00
4.90
4.80
4.60
4.50
4.40
4.30
4.20
4.10
4.00
Label it Teg on the chart.
Label it Toot on the chart.
Label it Tear on the chart.
8
10
11
12
13
14
15
16
18
19
20
21
22
Traffic (T)
25
Solution
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