Exam 5: Efficiency and Equity

Fitness is a magazine for women about health and exercise. Fitness offers year subscriptions for $12 on their website. Jess, Ania, Mandy, and Chloe exercise together and each enjoy reading Fitness. Jess is willing to pay $10, Ania is willing to pay $16, Mandy is willing to pay $24, and Chloe is willing to pay $12 for a subscription to the magazine. What is the value of market consumer surplus?

-The figure above shows the market for milk. The ________ price that producers must be offered to get them to produce 100 gallons of milk per day is ________.

Consumers don't always have to pay the maximum price they are willing to pay.

-The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is

-The figure illustrates the market for bagels. If the number of bagels is cut from 20 to 10 an hour, the deadweight loss is

According to the "fair rules" view of fairness, are taxes fair? Explain.

One problem with the utilitarian principle is that it ignores

What is the significance of the concepts "consumer surplus" and "producer surplus"?

Sam's demand curve for pizza

-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month

-The figure above shows the market supply curve for pizzas. a) What is the marginal social cost of the 20th pizza? b) What is the minimum supply price of the 20th pizza? c) If the price is $6 per pizza, what is the producer surplus for the 20th pizza? d) If the price is $6 per pizza, what is the total producer surplus? e) If the price is $8 per pizza, what is the total producer surplus? f) If the price is $10 per pizza, what is the total producer surplus?

When less than the efficient amount of a good is produced, how does the marginal social benefit of the last unit produced compare to its marginal social cost?

In a competitive equilibrium, the total consumer surplus must equal the total producer surplus.

A used car was recently priced at $20,000.00. Seeing the car, Bobby thought, "It's nice, but if I have to pay more than $19,500 for this car, then I would rather do without it." After negotiations, Bobby purchased the car for $19,250.00. His consumer surplus was equal to

-The table above gives the demand and supply schedules for bread. Assume that the only people who benefit from bread are the people who consume it and the only people who bear the cost of bread are the people who produce it. a) What is the maximum price that consumers are willing to pay for the 80th loaf of bread? b) What is the minimum price that producers are willing to accept to produce 200 loaves of bread? c) What is the efficient quantity of bread? d) If the market is efficient, what is the consumer surplus? e) If the market is efficient, what is the producer surplus? f) If one firm owns all the bread outlets and sells 120 loaves per day, what is the deadweight loss (if any)?

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost to the economy of Kaffenia of producing the 100th dozen doughnuts each day?

The market supply curve shows the

The supply curve for tablets shows the

-The figure above shows the market for coffee If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the deadweight loss is

Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500. How much producer surplus did Stefano obtain?