Exam 5: Efficiency and Equity

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

-In the above figure, at the equilibrium price and quantity, 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 ________.

If the marginal social benefit exceeds the marginal social cost of producing the next kilowatt hour of electricity, then it is efficient to produce as many kilowatt hours as possible.

Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price decreases from $9 to $8 then the consumer surplus from this unit will increase by

Marginal cost is

-In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. In comparison to a competitive market the producer surplus would rise by

Colorado State University allocates 10,000 tickets for each home game to students at no cost. Students are required to stand in line and prove they are a full time student to receive a free ticket. Community members can purchase season tickets or tickets to an individual game. How are football tickets allocated to community members?

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. When the marginal social benefit is equal to the marginal social cost of chocolate in Kaffenia

Currently tire producers must receive a price of $50 per tire to produce 5000 tires. If the supply curve of tires is upward sloping, then to produce one additional tire, tire producers will need to receive a price of

Utilitarianism is based on the argument that

-In the above figure, if the market price is $100 per ton, then the firm's producer surplus on the second ton of wheat is

The marginal social benefit curve for a product can be the same as the good's

Which of the following is TRUE?

-The figure above shows the market supply and market demand for pizza. a) What is the efficient quantity of pizzas? b) If 70,000 pizzas are produced, what area represents the deadweight loss? c) Why does the deadweight loss in part (b) occur? d) If 20,000 pizzas are produced, what area represents the deadweight loss? e) Why does the deadweight loss in part (d) occur?

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

The market supply curve shows the

A new car in the dealer's showroom had a sticker price of $35,900. Sally liked the car but decided she would pay no more than $32,000 for it, otherwise she would do without it. After haggling with the dealer, she purchased the car for $31,500. Did she gain any consumers surplus? If so, how much? If not, why not?

-The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

-The figure above shows the market for ink-jet printers. a) What are the equilibrium price and equilibrium quantity of printers? Is this equilibrium efficient? Explain. b) Calculate the total amount consumers paid for printers bought. c) Calculate the consumer surplus. d) Calculate the producer surplus.