Exam 5: Efficiency and Equity

At the quantity of 200 bushels of apples, the marginal social benefit of a bushel of apples is $100 and the marginal social cost is $50. To produce the efficient quantity of apples

Marginal cost is best defined as

-The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is ________.

"If there is an inefficient level of nursing care in South America, a deadweight loss exists." Is this statement true or false?

-The figure above shows the market supply and market demand curves for pizza. If the market is at its equilibrium, what area in the graph above represents: a) consumer surplus? b) producer surplus?

The Wii is a wildly popular home video game console released by Nintendo. The Wii system was first available in the U.S. in November, 2006 and has sold more than 30 million units as of August 2010. The Wii retails for $199. Suppose Ahmed is willing to pay $230, Lana is willing to pay $175, and Bodie is willing to pay $300 for a Wii. If these three are the only consumers in the market, what is the value of the market consumer surplus?

-In the above figure, if the price is $1.25 per gallon of milk and 5 million gallons are produced and consumed, then the consumer surplus is ________ and the producer surplus is ________.

If the marginal social benefit of ice cream curve shifts rightward because people now like ice cream better than before, the marginal social cost curve of ice cream will shift leftward.

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 Ania's consumer surplus?

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

What is producer surplus?

-The figure above shows the demand curve for DVDs. Use it to illustrate the consumer surplus if the price of a DVD is $15.

The annual Great Sofa Round-up is a collaborative event between Colorado State University and the City of Fort Collins aims to help students and neighbors get rid of unwanted furniture, while giving people in need access to inexpensive sofas. Suppose on the day of the Round-up, your friends take their couches to the main parking lot on campus where the Round-up is held. Raj will not sell his couch for less than $30, Emily will not sell her couch for less than $50, Nara will not sell her couch for less than $20, Sergio just wants to get rid of his couch and he is willing to give it away for free. At the Round-up, potential buyers think that all the couches available are basically the same and they are willing to buy a couch for $25. Who will sell their couch and what is the value of the market producer surplus?

Marginal benefit

When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity

-In the table above, the deadweight loss is zero when ________ umbrellas are produced and sold.

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the marginal cost of producing a DVD increases by $4, then the efficient number of DVDs is ________ a week.

One of the problems associated with the utilitarianism is that it does not recognize that

-The above table gives the market demand and market supply schedules for soda. What is the minimum price that producers are willing to accept for the 400th can of soda?

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?