Maximum Actual Price Minimum Person Price Willing (Equilibrium Person To Pay Price) Acceptable Price Actual Price (Equilibrium Price) Bashir $ 15 $ 10 Chander $ 5 $ 10 Barb 14 10 Chaaya 6 10 Bill 13 10 Chuck 7 10 Beeja 12 10 Chazen 8 10 Brent 11 10 Chuma 9 10 Blessing 10 10 Chad 10 10 Instructions: Enter your answers as a whole number. a. What are the equilibrium price and quantity for the data displayed in the two tables? 6 bag(s) 8 Saved b. Instead of bags of oranges, assume that the data in the two tables deal with a good (such as fireworks displays) that can be enjoyed by free riders who do not pay for it. If all the buyers in the two tables free ride, what quantity will private sellers supply? 0 c. Assume that we are back to talking about bags of oranges (a private good), but the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a tax of $2-per-bag on sellers. What is the new equilibrium price? What is the new equilibrium quantity? 3 bag(s) If the new equilibrium quantity is the optimal quantity, by how many bags were oranges being overproduced before? 3 bag(s)
Maximum Actual Price Minimum Person Price Willing (Equilibrium Person To Pay Price) Acceptable Price Actual Price (Equilibrium Price) Bashir $ 15 $ 10 Chander $ 5 $ 10 Barb 14 10 Chaaya 6 10 Bill 13 10 Chuck 7 10 Beeja 12 10 Chazen 8 10 Brent 11 10 Chuma 9 10 Blessing 10 10 Chad 10 10 Instructions: Enter your answers as a whole number. a. What are the equilibrium price and quantity for the data displayed in the two tables? 6 bag(s) 8 Saved b. Instead of bags of oranges, assume that the data in the two tables deal with a good (such as fireworks displays) that can be enjoyed by free riders who do not pay for it. If all the buyers in the two tables free ride, what quantity will private sellers supply? 0 c. Assume that we are back to talking about bags of oranges (a private good), but the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a tax of $2-per-bag on sellers. What is the new equilibrium price? What is the new equilibrium quantity? 3 bag(s) If the new equilibrium quantity is the optimal quantity, by how many bags were oranges being overproduced before? 3 bag(s)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Maximum
Actual Price
Minimum
Person
Price Willing
(Equilibrium
Person
To Pay
Price)
Acceptable
Price
Actual Price
(Equilibrium
Price)
Bashir
$ 15
$ 10
Chander
$ 5
$ 10
Barb
14
10
Chaaya
6
10
Bill
13
10
Chuck
7
10
Beeja
12
10
Chazen
8
10
Brent
11
10
Chuma
9
10
Blessing
10
10
Chad
10
10
Instructions: Enter your answers as a whole number.
a. What are the equilibrium price and quantity for the data displayed in the two tables?
6 bag(s)
8
Saved
b. Instead of bags of oranges, assume that the data in the two tables deal with a good (such as fireworks displays) that can be
enjoyed by free riders who do not pay for it. If all the buyers in the two tables free ride, what quantity will private sellers supply?
0
c. Assume that we are back to talking about bags of oranges (a private good), but the government has decided that tossed orange
peels impose a negative externality on the public that must be rectified by imposing a tax of $2-per-bag on sellers. What is the
new equilibrium price?
What is the new equilibrium quantity?
3 bag(s)
If the new equilibrium quantity is the optimal quantity, by how many bags were oranges being overproduced before?
3 bag(s)
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