Hate, Ellie, and Marquis are all planning to go to the Taylor Swift Eras tour. Marquis is a huge Tay: Swift fan and has already seen the Eras tour twice. He is willing to pay $1000 to see it again. Ellie and Nate haven't ever been to see her before. Ellie is willing to pay $500 for a ticket, and Nate is willing to pay $300 for a ticket. a) If tickets cost $250 and anyone who wanted a ticket could purchase one, what would their total consumer surplus be? b) If tickets cost $350 and anyone who wanted a ticket could purchase one, what would their total consumer surplus be? As we likely all know, there were more people who were willing to buy Taylor Swift tickets at the set prices than there were tickets to go around, so Ticketmaster sold tickets using a lottery system. c) Graph the market for Taylor Swift tickets, assuming that TicketMaster has a set number of tickets to sell, regardless of the price. Show the equilibrium price of tickets on your graph, the set price of tickets on your graph, and the resulting shortage. d) Now assume the three friends were only able to purchase 2 tickets for $250 each. What is the allocatively efficient way to split up the tickets? In one sentence or less, explain. e) Is splitting the tickets this way equitable? Why or why not?
Hate, Ellie, and Marquis are all planning to go to the Taylor Swift Eras tour. Marquis is a huge Tay: Swift fan and has already seen the Eras tour twice. He is willing to pay $1000 to see it again. Ellie and Nate haven't ever been to see her before. Ellie is willing to pay $500 for a ticket, and Nate is willing to pay $300 for a ticket. a) If tickets cost $250 and anyone who wanted a ticket could purchase one, what would their total consumer surplus be? b) If tickets cost $350 and anyone who wanted a ticket could purchase one, what would their total consumer surplus be? As we likely all know, there were more people who were willing to buy Taylor Swift tickets at the set prices than there were tickets to go around, so Ticketmaster sold tickets using a lottery system. c) Graph the market for Taylor Swift tickets, assuming that TicketMaster has a set number of tickets to sell, regardless of the price. Show the equilibrium price of tickets on your graph, the set price of tickets on your graph, and the resulting shortage. d) Now assume the three friends were only able to purchase 2 tickets for $250 each. What is the allocatively efficient way to split up the tickets? In one sentence or less, explain. e) Is splitting the tickets this way equitable? Why or why not?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:10. Nate, Ellie, and Marquis are all planning to go to the Taylor Swift Eras tour. Marquis is a huge Taylor
Swift fan and has already seen the Eras tour twice. He is willing to pay $1000 to see it again. Ellie
and Nate haven't ever been to see her before. Ellie is willing to pay $500 for a ticket, and Nate is
willing to pay $300 for a ticket.
a) If tickets cost $250 and anyone who wanted a ticket could purchase one, what would their
total consumer surplus be?
b) If tickets cost $350 and anyone who wanted a ticket could purchase one, what would their
total consumer surplus be?
As we likely all know, there were more people who were willing to buy Taylor Swift tickets at the
set prices than there were tickets to go around, so Ticketmaster sold tickets using a lottery
system.
Graph the market for Taylor Swift tickets, assuming that TicketMaster has a set number of
tickets to sell, regardless of the price. Show the equilibrium price of tickets on your graph,
the set price of tickets on your graph, and the resulting shortage.
d) Now assume the three friends were only able to purchase 2 tickets for $250 each. What is
the allocatively efficient way to split up the tickets? In one sentence or less, explain.
e) Is splitting the tickets this way equitable? Why or why not?
+
D
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