Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 22, Problem 8PA
Subpart (a):
To determine
Total surplus.
Subpart (b):
To determine
The efficient outcome.
Subpart (c):
To determine
The efficient outcome.
Subpart (d):
To determine
The efficient outcome.
Subpart (e):
To determine
The efficient outcome.
Subpart (f):
To determine
The efficient outcome.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The figure shows the demand curve for pizza. A) What is the 4 point marginal benefit of pizza number 20? B) What is the maximum price that the consumer wants to pay for pizza number 20? C) If the price of a pizza is $6, what is the consumer surplus for the 20th pizza? d) If the price of a pizza is $10, what is the consumer surplus? e) If the price of a pizza is $6, what is the consumer surplus?
Look at the two tables below. What is the total surplus if Bob buys a unit from Carlos? If Barb buys a unit from
Courtney? If Bob buys a unit from Chad? If you match up pairs of buyers and sellers so as to maximize the total surplus
of all transactions, what is the largest total surplus that can be achieved?
Maximum Price
Minimum
Person
Person
Willing to Pay
Acceptable Price
Bob
$19
Carlos
$5
Barb
16
Courtney
7
Bill
14
Chuck
Bart
12
Cindy
11
Brent
10
Craig
13
Betty
8
Chad
15
Peter, John, and James are discussing how to share three chocolate bars and three bags of chips. For each of the following statements, state whether the statement is TRUE or FALSE and provide a short explanation for your choice.
a) It is always Paretig efficient for Peter, John, and James to have one chocolate bar and one bag of chips each.
Chapter 22 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Knowledge Booster
Similar questions
- 1. Road construction is going on Riccarton Road. 100 Uber drivers want to drop their passengers at the airport. Each driver is deciding whether to take Riccarton Road or take Blenheim Road. The cost of travelling through Riccarton Road is $10 (additional fuel required due to slow traffic), while the Blenheim Road route has a low fuel cost (theoretically let's assume $0) but takes more time to reach the airport. In deciding on a route, each driver cares only about income, denoted i, and his travel time, denoted t (where we have made the dollar value of one unit of travel time equal to 1). Driver's payoff is assumed to be his/ her profit (income - cost of travelling, including travel time). Assume that each driver has same income of $500. If m drivers are on Riccarton Road, the travel time for a driver on Riccarton Road is assumed to be m (in dollars). In contrast, if m drivers take Blenheim Road, the travel time for those on the Blenheim Road is 2m (again, in dollars). Drivers make…arrow_forwardu work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, flopsicles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies increases by 4%, the quantity of flopsicles sold increases by 1% and the quantity of mookies sold decreases by 5%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the…arrow_forward. Suppose the most you would be willing to pay to have a freshly washed car before going out on a date is $4.00. The smallest amount for which you would be willing to wash someone else's car is $2.50. You are going out this evening and your car is dirty. How much economic surplus would you receive from washing it?arrow_forward
- The rent on an apartment in a particular building near campus is $1,200 per month. If Min would be willing to pay up to $1,400, Genevieve would be willing to pay up to $1,500, Fraser would be willing to pay up to $1,600, and Kayden would pay no more than $1,000, what is the consumer surplus for this group of students who would like to live in the building? Explain how you calculated this consumer surplusarrow_forwardThe graph shows the schedule for hours of tutoring in economics. If the price increases from equilibrium at $10 to $15, total surplus for the market will decrease by, in numerals, $_____. Please type the correct answer in the following input field, and then select the submit answer button or press the enter key when finished. Your answer:arrow_forwardSuppose there are two consumers A and B, and two goods x and y. A's utility function has the following form UA = XA - (XB)1. Which of the following is true? Consumer A's consumption of good x exhibits a negative externality. Consumer A's consumption of good x exhibits a positive externality. Consumer B's consumption of good x exhibits a negative externality. Consumer B's consumption of good x exhibits a positive externality.arrow_forward
- . Your best friend has just purchased a new Sport Utility Vehicle (SUV). “These things are great.” he says. “They can get you to the private unspoiled places no one else can reach. On the road, it’s nice because you sit so high and can see over the other cars.” Your friend thinks everyone should buy an SUV. Is there an error in his reasoning? If so, what is it? (Use economics terms).arrow_forwardECONOMICS Please Show Your Work With an Explanation This problem set explores what happens to pricing when we add network effects, which are a specific form of positive externality. You’ve invented a 3D fax machine. This cool technology is almost like a Star Trek teleporter. You can scan an object at one machine, which creates an exact copy at another 3D fax machine. It is so valuable that as more people use it, it becomes more valuable, and the price any given user is willing to pay increases in turn. Consider a scenario in which there are 12 possible users, who each value the fax machine at i*n, where i is the index of that user (from 1 to 12), and n is the number of other purchasing users. So, if no one buys the 3D fax machine, everyone values it at 0. However, as soon as one person buys the device, then the 12 possible users begin to value the product at 1, 2, … 12, respectively. If 2 people purchase, the 12 possible users’ valuations increase to 2, 4, … 24, and so on. Because…arrow_forwardThe National Hockey League decides to put a new franchise in Hamilton which is close to existing teams in Buffalo and Toronto. Which of the following best describes the impact of this decision? Select one: a. product-variety externality, which harms consumers b. business-stealing externality, which benefits consumers c. product-variety externality, which benefits consumers d. business-stealing externality, which harms consumersarrow_forward
- Walter, Yvonne, Tyler, and Phoebe are college roommates. They're trying to decide where the four of them should go for spring break: Vail or Daytona Beach. If they order the tickets by 10:00 PM on February 1, the cost will be just $500 per person. If they miss that deadline, the cost rises to $1,200 per person. The following table shows the benefit (in dollar terms) that each roommate would get from the two trips. Roommate Walter Yvonne Tyler Phoebe Benefit from Vail $1,250 $800 $650 $600 Benefit from Daytona Beach The roommates tend to put off making decisions. So, when February 1 rolls around and they still haven't made a decision, they schedule a vote for 9:00 PM that night. In case of a tie, they will flip a coin between the two vacation destinations. The roommates will get the most total benefit if they choose to go to Roommate Walter Yvonne Tyler Phoebe $550 $800 $850 $1,050 Given the individual benefits each roommate receives from the two trips, which trip will each roommate…arrow_forwardConsumer surplus is calculated by taking the difference of the price consumers are willing to pay and the price actually paid. When the price is $4, the consumer would buy only two bottles because the value the consumer would get from the first bottle is $7. This implies, the surplus is $3. Similarly for the second bottle, the value the consumer would get from consuming it is $5 where the price the consumer will pay is $4, this implies the surplus is $1. Lastly, for the third bottle the value is $3 and the price is $4 so the price surpasses the value, therefore the consumer will not consumer beyond two bottles. The consumer surplus could be calculated as: Consumer Surplus = (7-4) + (5-4) = 3 + 1 = 2 This means the consumer will buy two bottles. If the price falls to $2, the consumer would only buy three bottles because the value the consumer gets from the first bottle valued at $7 versus the $2 paid implies a consumer…arrow_forwardEddie goes to Best Buy to buy a new TV. He is willing to pay $400 for the TV he wants. If the price for the TV is $275, what is Eddie's consumer surplus? $125 $675 $275arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc