Economic surplus at 8 million hours: $ b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to label the actual hours, and calculate the new value of the economic surplus in the market at 4 million hours. Economic surplus at 4 million hours: S million. c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours. million.
Economic surplus at 8 million hours: $ b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to label the actual hours, and calculate the new value of the economic surplus in the market at 4 million hours. Economic surplus at 4 million hours: S million. c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours. million.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 13SQ
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Question
Transcribed Image Text:Welfare and Efficiency-End
of Chapter Problem
Consider the national market for in-home childcare, depicted in the accompanying graph.
a. At 8 million hours, what is the size of the total economic surplus in this market? Place the shape on the graph to label total
economic surplus in this market at 8 million hours, and calculate the value of the economic surplus.
Rate ($ per hour)
2 2 2 2 2 2 2 2 O..
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
0
2
4 6
10
12
8
Quantity (millions of hours)
Economic surplus at 8 million hours: S
14
BO
16
Supply
18 20
Economic surplu...
Deadweight loss
Demand
million.
Transcribed Image Text:Economic surplus at 8 million hours: $
b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to label
the actual hours, and calculate the new value of the economic surplus in the market at 4 million hours.
Economic surplus at 4 million hours: S
c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours.
d. At 4 million hours, the marginal benefit to households is
e. The efficient quantity of hours in this market is
million hours.
million.
million.
the marginal cost to child care providers.
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Transcribed Image Text:d. At 4 million hours, the marginal benefit to households is
e. The efficient quantity of hours in this market is
million hours.
the marginal cost to child care providers.
Solution
by Bartleby ExpertFollow-up Question
Transcribed Image Text:c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours.
d. At 4 million hours, the marginal benefit to households is
e. The efficient quantity of hours in this market is
million hours.
the marginal cost to child care providers.
Solution
by Bartleby ExpertKnowledge Booster
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