Question in image. Been stuck on this for hours. Thanks for your help! I paid $8 a ticket for 4 (non-refundable) tickets to a show that I can't use and can't resell, so l'm goingto give them to my friends. I have two friends whose Marginal Willingness to Pay (MWTP) for thetickets are in the table below. I want to be fair to my friends, so I give them two tickets each. What isthe change in surplus if I allocated them efficiently instead?Do not include the $ sign and remember to include a negative sign if you want to say that surplus hasdecreased.A'sB'sMWTPMWTP1 $111 $612 $41$58$46$363 $324 $27ered166wer5The total cost of the tickets doesn't change with the reallocation, however, the sum of theMWTP does. Find the sum of MWTP for the initial allocation. The efficient allocation wouldgive the first ticket to A because he has the highest MWTP for Q=1 then to give the nextthree to B because her marginal willingness to pay for each of her first three tickets is greaterthan A's second ticket.

Friend A's MWTP for the first two tickets: Friend B's MWTP for the first two tickets: Therefore, the…

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Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 8PA

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Question in image. Been stuck on this for hours. Thanks for your help!

I paid $8 a ticket for 4 (non-refundable) tickets to a show that I can't use and can't resell, so l'm going
to give them to my friends. I have two friends whose Marginal Willingness to Pay (MWTP) for the
tickets are in the table below. I want to be fair to my friends, so I give them two tickets each. What is
the change in surplus if I allocated them efficiently instead?
Do not include the $ sign and remember to include a negative sign if you want to say that surplus has
decreased.
A's
B's
MWTPMWTP
1 $111 $61
2 $41
$58
$46
$36
3 $32
4 $27
ered
166
wer
5
The total cost of the tickets doesn't change with the reallocation, however, the sum of the
MWTP does. Find the sum of MWTP for the initial allocation. The efficient allocation would
give the first ticket to A because he has the highest MWTP for Q=1 then to give the next
three to B because her marginal willingness to pay for each of her first three tickets is greater
than A's second ticket.

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