Scribd Logo
Upload

Welcome to Scribd!

  • 65 views

    Equity and Efficiency Problems

    Uploaded by

    Ana Hern
    1. The efficient quantity of spring water is 30 bottles per day. 2. If 30 bottles are produced, the consumer surplus is $30 and the producer surplus is $30, resulting in a deadweight loss of $0. 3. If the price of train travel is 50 cents per passenger mile: - Joe's consumer surplus is $10 - Jean's consumer surplus is $150 - Joy's consumer surplus is $50 Jean has the largest consumer surplus because at 50 cents per mile she demands the most passenger miles. If the price falls to 30 cents, the change in consumer surplus for each is Joe $20, Jean $100, Joy $50.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Equity and Efficiency Problems

    Uploaded by

    Ana Hern
    65 views1 page
    1. The efficient quantity of spring water is 30 bottles per day. 2. If 30 bottles are produced, the consumer surplus is $30 and the producer surplus is $30, resulting in a deadweight loss of $0. 3. If the price of train travel is 50 cents per passenger mile: - Joe's consumer surplus is $10 - Jean's consumer surplus is $150 - Joy's consumer surplus is $50 Jean has the largest consumer surplus because at 50 cents per mile she demands the most passenger miles. If the price falls to 30 cents, the change in consumer surplus for each is Joe $20, Jean $100, Joy $50.

    Original Description:

    sfa

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The efficient quantity of spring water is 30 bottles per day. 2. If 30 bottles are produced, the consumer surplus is $30 and the producer surplus is $30, resulting in a deadweight loss of $0. 3. If the price of train travel is 50 cents per passenger mile: - Joe's consumer surplus is $10 - Jean's consumer surplus is $150 - Joy's consumer surplus is $50 Jean has the largest consumer surplus because at 50 cents per mile she demands the most passenger miles. If the price falls to 30 cents, the change in consumer surplus for each is Joe $20, Jean $100, Joy $50.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    65 views1 page

    Equity and Efficiency Problems

    Uploaded by

    Ana Hern
    1. The efficient quantity of spring water is 30 bottles per day. 2. If 30 bottles are produced, the consumer surplus is $30 and the producer surplus is $30, resulting in a deadweight loss of $0. 3. If the price of train travel is 50 cents per passenger mile: - Joe's consumer surplus is $10 - Jean's consumer surplus is $150 - Joy's consumer surplus is $50 Jean has the largest consumer surplus because at 50 cents per mile she demands the most passenger miles. If the price falls to 30 cents, the change in consumer surplus for each is Joe $20, Jean $100, Joy $50.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Equity and Efficiency Problems

    1. The table gives the demand


    Quantity Quantity
    and supply schedules for
    Price demanded supplied
    spring water.
    (dollars per bottle) (bottles per day)
    a. What is the maximum price
    that consumers are willing to 0 80 0
    pay for the 30th bottle? 0.50 70 10
    b. What is the minimum price 1.00 60 20
    that producers are willing 1.50 50 30
    to accept for the 30th 2.00 40 40
    bottle? 2.50 30 50
    c. Are 30 bottles a day less 3.00 20 60
    than or greater than the 3.50 10 70
    efficient quantity? 4.00 0 80
    d. What is the consumer
    surplus if the efficient quantity of spring water is produced?
    e. What is the producer surplus if the efficient quantity of spring water is produced?
    f. What is the deadweight loss if 30 bottles are produced?
    2. The table gives the demand schedules for train travel for Joe, Jean, and Joy.
    a. If the price of train travel is 50 Price Quantity demanded
    cents a passenger mile, what is (cents (passenger miles)
    the consumer surplus of each per mile) Joe Jean Joy
    consumer? 10 50 600 300
    b. Which consumer has the 20 45 500 250
    largest consumer surplus? 30 40 400 200
    Explain why. 40 35 300 150
    c. If the price of train travel 50 30 200 100
    falls to 30 cents a 60 25 100 50
    passenger mile, what is the 70 20 0 0
    change in consumer 80 15 0 0
    surplus of each consumer? 90 10 0 0
    100 5 0 0
    110 0 0 0

    You might also like