4-2 Consider four friends, Rahim, Karim, Jack and Jones, who are all looking to get onehaircut each. And four barbers, Rahima, Karima, Margaret and Sophia, are willing toprovide haircutting services. The following table gives information on maximum WTPand minimum WTA for each buyer and seller:NameWTP (in Taka)NameWTA (in Taka)Rahim (RA)Karim (KA)Jack (JK)Jones (JO)Rahima (RM)Karima (KM)Margaret (MA)Sophia (SO)400400600300200500800200(a) Which of the buyers will be able to get haircuts? Which sellers will cut their hair?Intuitively explain/justify your answer.(b) Calculate total consumer and producer surplus for this market.

Willingness to pay (WTP) is the maximum amount that an individual would pay to obtain a good.…

Name WTP (in Taka) Name WTA (in Taka) Rahim (RA) Karim (KA) Jack (JK) Jones (JO) Rahima (RM) Karima (KM) Margaret (MA) Sophia (SO) 400 400 600 300 200 500 800 200 (a) Which of the buyers will be able to get haircuts? Which sellers will cut their hair? Intuitively explain/justify your answer. (b) Calculate total consumer and producer surplus for this market.

Name WTP (in Taka) Name WTA (in Taka) Rahim (RA) Karim (KA) Jack (JK) Jones (JO) Rahima (RM) Karima (KM) Margaret (MA) Sophia (SO) 400 400 600 300 200 500 800 200 (a) Which of the buyers will be able to get haircuts? Which sellers will cut their hair? Intuitively explain/justify your answer. (b) Calculate total consumer and producer surplus for this market.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4-2 Consider four friends, Rahim, Karim, Jack and Jones, who are all looking to get one
haircut each. And four barbers, Rahima, Karima, Margaret and Sophia, are willing to
provide haircutting services. The following table gives information on maximum WTP
and minimum WTA for each buyer and seller:
Name
WTP (in Taka)
Name
WTA (in Taka)
Rahim (RA)
Karim (KA)
Jack (JK)
Jones (JO)
Rahima (RM)
Karima (KM)
Margaret (MA)
Sophia (SO)
400
400
600
300
200
500
800
200
(a) Which of the buyers will be able to get haircuts? Which sellers will cut their hair?
Intuitively explain/justify your answer.
(b) Calculate total consumer and producer surplus for this market.

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