Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per pair of socks) 10 9 8 a Supply Demand 5 6 0 1 2 3 4 7 QUANTITY (Pairs of socks per day) 8 9 10 Graph Input Tool Quantity Marginal Utility (Dollars per pair of socks) 1 9 Marginal Cost (Dollars per pair of socks) 1

Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per pair of socks) 10 9 8 a Supply Demand 5 6 0 1 2 3 4 7 QUANTITY (Pairs of socks per day) 8 9 10 Graph Input Tool Quantity Marginal Utility (Dollars per pair of socks) 1 9 Marginal Cost (Dollars per pair of socks) 1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. Marginal analysis and efficiency
The following graph shows the market demand and supply curves for pairs of socks that are sold in a perfectly competitive market.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per pair of socks)
is
10
9
8
bo
0
Supply
Demand
0 1 2 3 4 5 6 7 8
QUANTITY (Pairs of socks per day)
9 10
Graph Input Tool
Quantity
Marginal Utility
(Dollars per pair of
socks)
1
9
Marginal Cost
(Dollars per pair of
socks)
(?)
1
If the economy produces and sells two pairs of socks (represented by the green line on the graph), the marginal utility (MU) of the last pair of socks
bought is
and the marginal cost (MC) of the last pair of socks sold is
. This means that the MU of the last pair of socks bought
the MC of the last pair of socks sold, so the market is

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