Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Help please
3
Transcribed Image Text:The graph shows the market for paper.
The government passes a new law that requires producers to sell 100
tons of paper a day.
www
This market for paper is
OA. inefficient; the marginal cost of the 100th ton of paper is greater
than the marginal benefit from the 100th ton of paper
OC.
OD.
because
B. inefficient; the marginal benefit from the 100th ton of paper is
greater than the marginal cost of the 100th ton of paper
efficient; production is greater than zero
efficient; the marginal cost of the 100th ton of paper equals the
marginal benefit from the 100th ton of paper
O E. inefficient; more paper could be produced
Draw the deadweight loss when production is 100 tons of paper a day.
Label it DWL.
Selected:
none
4
Transcribed Image Text:to sell 100
per is greater
per
of paper is
paper
per equals the
s of paper a day.
0
20.00-
18.00-
16.00
14.00-
12.00-
10.00-
8.00-
6.00+
4.00
2.00
Price (dollars per ton)
0.00
AU
SAHUR
0
FISI
1027
Hiil
6.00
20
HAY
D
40
60
80 100 120 140
Quantity (tons per day)
>>> Draw only the objects specified in the question.
Delete Clear
ALTE MAREN
1817
S
Next
ES
O
X
5 US
SE
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