How do you justify a dollar estimate of the wedge between willingness to pay of buyers and the opportunity cost of suppliers from a firm such as Walmart
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Q: Suppose that the equilibrium price in the market for widgets is $5. If a law reduced the maximum…
A: PRODUCER SURPLUS: Producer surplus is described as the variation between the price for which a…
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A: Opportunity cost is the sworn off benefit that would have been gotten from a choice not picked. To…
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A: Total surplus is the total economic surplus earned by different agents in the economy. Total surplus…
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Q: Refer to the two tables below, which show, respectively, the willingness to pay and the willingness…
A: we know that equilibrium price is obtained when the supply of goods is equal to demand.
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Q: The following graph shows the supply curve for a group of students looking to sell used statistics…
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Q: Look at the tables below, which show, respectively, the willingness to pay and willingness to accept…
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Q: Look at Tables , which show, respectively, the willingness to pay and willingness to accept of…
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Q: Half of the used cars for sale in a market are good and the other half are lemons. Owners of good…
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- Which of the following is true of market social equilibrium if third parties, people outside the market for a good, bear part of the cost of the good's production? Socially optimal quantity will be greater than the private quantity, and the socially optimal price will be greater than the private price. Socially optimal quantity will be less than the private quantity, and the socially optimal price will be greater than the private price. Socially optimal quantity will equal the private quantity, and the socially optimal price will equal the private price. Socially optimal quantity will be less than the private quantity, and the socially optimal price will be less than the private price. Socially optimal quantity will be greater than the private quantity, and the socially optimal price will be less than the private price.which statement is true In the absence of market power and externalities, efficiency is achieved in a market when the sum of producer surplus and consumer surplus is maximized. The benefit received by sellers in a market is measured by producer surplus and producer surplus is calculated as the amount sellers receive for their product minus the cost of production. In a market, the marginal buyer is the buyer who would be the first to leave the market if the price were any higher. Moving production from a high-cost producer to a low-cost producer will decrease total surplus. Suppose the United States changed its laws to allow for the legal sale of a kidney and the government allowed a free market in organs for transplant then there would be a decrease in the price of a kidney and an increase in the shortage of kidneys for transplant. Total surplus in the market is the summation of consumer surplus and producer surplus and it is maximized at the market equilibrium in the absence of…can policy market interventions cause consumer or producer surplus? Explain why using specific reasoning.
- Explain why we cannot compute 'Consumers Surplus' unless we can calculate Willingness- to -Pay, which in turn depends on the estimation of the consumer's Reservation Price. What is the economic implication of Consumers' Surplus being equal to zero? (Plagiarism will be penalized)Look at Tables together. What is the total surplus if Bob buys a unit from Carlos? If Barb buys a unit from Courtney? If Bob buys a unit from Chad? If you match up pairs of buyers and sellers so as to maximize the total surplus of all transactions, what is the largest total surplus that can be achieved?Look at Tables , which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables. a. What are the equilibrium price and quantity for the data displayed in the two tables?b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If al the buyers free ride, what will be the quantity supplied by private sellers?c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality onthe public that must be rectified by imposing a $2-perbag tax on sellers. What is the new equilibrium price and quantity? If the new equilibrium quantity is the optimal quantity, by how…
- Suppose five people have houses on the same small lane. They all individually benefit from regular maintenance of the lane. Their individual marginal benefit curves are P = 8 ― (1/10)Q, where P reflects a willingness to pay in thousands and Q is the length of the road repaired in ten-yard units. The cost of maintenance is $2,000 per ten yards. Suppose one person is currently the only one paying for maintenance. How much does this person buy, and what is the deadweight loss? Does anyone individually have an incentive to pay for additional maintenance, and why or why not?The following graph shows the supply curve for a group of students looking to sell used tablets. Each student has only one used tablet to sell. Each rectangular segment under the supply curve represents the “cost,” or minimum acceptable price, for one student. Assume that anyone who has a cost just equal to the market price is willing to sell his or her used tablet.Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of individual bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
- Suppose two bars, “the Last Jar” and “Prince Alfred”, can choose to sell a pint of beer for either $10 or $12. For simplicity, assume that: these are the only two possible prices; there are no costs (e.g., there is no cost for obtaining and serving the beer), and each customer drinks exactly one pint of beer. There are two types of customers: professors and students. Professors are not price-sensitive and go to the bar closest to their department’s building. Thus, 50 professors from the Melbourne School of Engineering go to Prince Alfred, while 50 professors from the Melbourne Graduate School of Education go to the Last Jar. Meanwhile, the students, who are 200 in total, are price sensitive. They go to the bar with the lowest price –or, if both bars charge the same price, then they split evenly. Simultaneous game: Suppose that the two bars must choose what price to set simultaneously. a) Write the normal form of the game. b) What is the Nash Equilibrium (NE) of this game?Suppose two bars, “the Last Jar” and “Prince Alfred”, can choose to sell a pint of beer for either $10 or $12. For simplicity, assume that: these are the only two possible prices; there are no costs (e.g., there is no cost for obtaining and serving the beer), and each customer drinks exactly one pint of beer. There are two types of customers: professors and students. Professors are not price-sensitive and go to the bar closest to their department’s building. Thus, 50 professors from the Melbourne School of Engineering go to Prince Alfred, while 50 professors from the Melbourne Graduate School of Education go to the Last Jar. Meanwhile, the students, who are 200 in total, are price sensitive. They go to the bar with the lowest price –or, if both bars charge the same price, then they split evenly. Sequential game: a) Suppose the Last Jar chooses what price to set first. Then, after observing the price set by the Last Jar, Price Alfred chooses what price to set. Draw the extensive form…A local school administrator is concerned that flu outbreaks are putting children at risk, so she proposes that the state should subsidize flu shots in order to increase coverage rates. -Are the administrator’s concerns valid—are too few children getting flu shots—and will a subsidy help? -The school nurse suggests publishing a list of which kids did not get a flu shot, in the hope that public shaming will lead people to vaccinate their children. Is this strategy likely to work?