ECONOMICS W/CONNECT+20 >C<
20th Edition
ISBN: 9781259714993
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 5, Problem 3DQ
To determine
The difference between the rent seeking and the profit maximization.
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10:17
OT
1. A college student enjoys eating pizza. Her
willingness to pay for each slice is shown in the
following table:
Number of pizza
slices
к
1
2
3
4
5
6
7
Willingness to pay (per
slice)
$6
+
LO
5
4
3
2
1
a. If pizza slices cost $3 each, how many slices
will she buy? How much consumer surplus will
she enjoy?
O
3
1. if alpha - 3 / 4 and H - 1000 and L - 200 what is the minimum rent the landlord charges such that the absolute difference between the rent and the share cropping contract for the tenant in the good state ) is twice as large as the difference between the sharecropping and the rent contract in the bad state )
O. 500
O. 350
O. 233.33
O. 300
2. If UIA - A - 1 / 2 , X - 144 , Y - 64.p - 1 / 2 and CE - 1.5 . Calculate the maximum value of a for the imperfect insurance to be incentive compatible and the intercept of the ICC respectively ,
O. < 0.125, >4.
O.
Consider that the market demand for a textbook is given by P = 100 - 20 land the market supply is given by P = 10 + Q. Suppose a price
ceiling of $20 is imposed. What is the deadweight loss?
O 300
O 450
O 600
O 150
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