B. The figure below shows the market of physician visit. Current market price for each physician visit is $5. Price (S) 9 5 Pret = $5 Number of Physician Visits (Q) 0 1 2 3 1) According to the figure, what is the optimal number of physician visits which can maximize consumer surplus? 2) Calculate total consumer surplus when the number of physician visits reaches the optimal amount. 3) When market price rises from $5 to $6, how will the optimal number of physician visits and consumer surplus change? 00 7 65 6

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

part B needed

1. Utility and Consumer Surplus
A. Use the figure below to fill in the total utility and marginal utility of medical
care in the table. In this example, is the marginal utility of health care
increasing or decreasing? What are some reasons why this might be the
case (briefly explain; approximate 3 sentences)?
Health (H)
Utility
16
15
13
10
3
4 Medical care (q)
1
2
Units of Medical Care
0
1
Total Utility
Marginal Utility
2
3
4
Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own
demand for going to the dentist to get a check-up?
Transcribed Image Text:1. Utility and Consumer Surplus A. Use the figure below to fill in the total utility and marginal utility of medical care in the table. In this example, is the marginal utility of health care increasing or decreasing? What are some reasons why this might be the case (briefly explain; approximate 3 sentences)? Health (H) Utility 16 15 13 10 3 4 Medical care (q) 1 2 Units of Medical Care 0 1 Total Utility Marginal Utility 2 3 4 Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own demand for going to the dentist to get a check-up?
B. The figure below shows the market of physician visit. Current market price for
each physician visit is $5.
Price ($)
9
8
PMKT = $5
Number of Physician
Visits (Q)
0 1 2 3 4
1) According to the figure, what is the optimal number of physician visits which
can maximize consumer surplus?
2) Calculate total consumer surplus when the number of physician visits
reaches the optimal amount.
3) When market price rises from $5 to $6, how will the optimal number of
physician visits and consumer surplus change?
765
Transcribed Image Text:B. The figure below shows the market of physician visit. Current market price for each physician visit is $5. Price ($) 9 8 PMKT = $5 Number of Physician Visits (Q) 0 1 2 3 4 1) According to the figure, what is the optimal number of physician visits which can maximize consumer surplus? 2) Calculate total consumer surplus when the number of physician visits reaches the optimal amount. 3) When market price rises from $5 to $6, how will the optimal number of physician visits and consumer surplus change? 765
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Arrow's Impossibility Theorem
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education