Table 74For each of the three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers oforanges, and only three oranges can be supplied per day.Willingness to Pay(Dollars)First Orange Second Orange Third OrangeAllison2.001.500.75Bob1.500.751.000.60Charisse0.250.00Refer to Table 7-4. If the market price of an orange increases from $0.80 to $1.05, then consumer surplusa. increases by s0.75.b. decreases by $0.75e decreases by S1.00d. decreases by $0.95

Here we calculate the consumer surplus and choose the correct option by using the given information…

Vor each of the three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Hob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. Wilingness to Pay (Dollars) First Orange Second Orange Third Orange Allison 2.00 1.50 0.75 Bob 1.50 1.00 0.60 Charisse 0.75 025 0.00 Refer to Table 7-4. If the market price of an orange increases from $0.8o to $1.05, then consumer surplus a increases by S0.75. Ob. decreases ty 50.75. Cdecreases by $1.00 d. decreases tby $0.95

Vor each of the three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Hob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. Wilingness to Pay (Dollars) First Orange Second Orange Third Orange Allison 2.00 1.50 0.75 Bob 1.50 1.00 0.60 Charisse 0.75 025 0.00 Refer to Table 7-4. If the market price of an orange increases from $0.8o to $1.05, then consumer surplus a increases by S0.75. Ob. decreases ty 50.75. Cdecreases by $1.00 d. decreases tby $0.95

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter8: Market Failure

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

Review the numbers for Canada and Venezuelafrom Table 33.12 which describes how many barrelsof oil and tons of lumber the workers can produce. Usethese numbers to answer the rest of this question.a. Draw a production possibilities frontier for eachcountry. Assume there are 100 workers in eachcountry. Canadians and Venezuelans desire bothoil and lumber. Canadians want at least 2,000tons of lumber. Mark a point on their productionpossibilities where they can get at least 3,000tons.b. Assume that the Canadians specializecompletely because they figured out they havea comparative advantage in lumber. They arewilling to give up 1,000 tons of lumber. Howmuch oil should they ask for in return for thislumber to be as well off as they were with notrade? How much should they ask for if theywant to gain from trading with Venezuela? Note:We can think of this “ask” as the relative price ortrade price of lumber.c. Is the Canadian “ask” you identified in (b) alsobeneficial for Venezuelans? Use the…
Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $445,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Ana 510,000 Charles 470,000 Dina 420,000 Gilberto 390,000 Juanita 380,000 Yakov 600,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. A. Ana B. Charles C. Dina D. Gilberto E. Juanita F. Yakov Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $432,500. This fourth…
Sadaam Hussein is deciding where to hide his weapons of mass destruction(WMD), while the United Nations is deciding where to look for them. Thepayoff to Hussein from successfully hiding WMD is 5 and from havingthem found is 2. For the UN, the payoff to finding WMD is 9 and from notfinding them is 4. Hussein can hide them in facility X, Y, or Z. The UNinspection team has to decide which facilities to check. Because the inspectors are limited in terms of time and personnel, they cannot check allfacilities.a. Suppose the UN has two pure strategies: It can either inspect facilitiesX and Y (both of which are geographically close to each other) orinspect facility Z. Find a Nash equilibrium in mixed strategies.b. Suppose the UN can inspect any two facilities, so that it has three purestrategies. The UN can inspect X and Y, X and Z, or Y and Z. Find aNash equilibrium in mixed strategies.
Suppose that there are three beachfront parcels of land available for sale in Astoria and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $570,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Ana 630,000 Charles 590,000 Dina 550,000 Gilberto 510,000 Juanita 500,000 Yakov 700,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Ana Charles Dina Gilberto Juanita Yakov Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $560,000. This fourth parcel ____ (will,…
53. The Indiana University basketball team trails by twopoints with eight seconds to go and has the ball. Shouldit attempt a two-point shot or a three-point shot?Assume that the Indiana shot will end the game and thatno foul will occur on the shot. Assume that a three-pointshot has a 30% chance of success, and atwo-point shot has a 55% chance of success. Finally,assume that Indiana has a 55% chance of winning inovertime.
[MUST SHOW WORKI You and your friend Tom are stranded on a deserted island and need to survive by collecting firewood and fishing for food. You can collect 8 logs per hour or 200 calories of fish per hour. Your friend Tom can collect 3 logs per hour or 500 calories of fish per hour. Who has an absolute advantage in collecting firewood? Select one: O A. Both You and Tom. O B. Neither You nor Tom. O C. You. O D. Tom. O E. Impossible to calculate without more information.
Situation 37-2Dan and Ann live in the same community and both can participate in two activities, producing and stealing. Refer to Situation 37-2. Ann spends 8 hours of each day producing and 1 hour of each day stealing. It is probably the case for her that a. There is not enough information to answer the question. b. her MB/MC ratio for producing never changed, no matter how much or how little she produced. c. her MB/MC ratio for stealing never changed, no matter how much or how little she stole. d. at some point the MB/MC ratio for producing fell below the MB/MC ratio for stealing. e. her MB/MC ratio for producing was always greater than her MB/MC ratio for stealing.
1. Write situations that can present the different barriers at communicationand ways to avoid these.BarriersExample SituationPossible Strategy that canbe used to AvoidMisunderstanding1. Physical Barier2. Semantic Barrier3. PsychologicalBarrier4. Mechanical Barrier5. Cultural Bonet II Identity the nonverbal cues present in eoch situation and underline thewords that links to it. 1. She always wears her bracelet when she joins any contest._2. The reason of avoiding her because of ourmisunderstanding3. Brion likes to pinch my cheeks all the time.-4. The aroma of his cottee wakes her up in the morning_5. Her dance moves really prove that she's a dancer6. Those students who are wearing long sleeves and grayskirt are Tourism students.7. She received a lot of medals in her graduation8. Her parents told him to wait Celine reaches 18 years old,so that he can finally court her.9. Jenna and Kaye can't be separated in their classroom10. His smiles can brighten up my day!
Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Charles 900,000 Dina 810,000 Gilberto 770,000 Juanita 720,000 Lorenzo 690,000 Neha 680,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Charles Dina Gilberto Juanita Lorenzo Neha Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $732,500. This fourth…
1. Write down an exchange economy model with two individuals and two goods, in whichthere is no consumption externality. State and explain the key assumptions of the model.Using the model, answer the following questions:(a) Explain carefully how the concept of Pareto efficiency differs from that of socialwelfare.(b) State the Second Theorem of Welfare Economics and explain carefully why it holds.What is the importance of the assumption of convex preferences to this theorem?(c) Explain the concept of the utility possibility frontier. What is the role of the utilitypossibility frontier in the social welfare maximization problem of a welfarist society?
Q2. Preferences and utilityLet's assume that country A prefers not to make additional concessions (outcome C1) to country B than granting those concessions (outcome C2), but a continued war (outcome C3) would be worse than making the additional concessions (C2). The following utility function over the outcomes specifies the intensity of preferences for country A over the outcomes: u(C1) = 1, u(C2) = 0.3, and u(C3) = 0. Country A can choose to refuse concessions (action A1) or allow concessions (action A2). The outcome that will occur is a function of the "type" of country B's leader.If country A refuses concession (A1), country B will not initiate a war (outcome C1) if country B's leader is amicable, while it will enter a war (outcome C3) if the leader is belligerent. There is a probability p(S1) = 0.6 that country B's leader is amicable and a probability p(S2) = 0.4 that country he's belligerent. If country A allows concession (A2), both in case of country A is amicable p(S1) and…
1. In the Traveler’s Dilemma, each of two people chooses a number between 180and 300. Each is paid the lower of the two numbers, but the person who choosesthe higher number must pay an amount x to the person who chose the lowernumber. In one case, x = 5, while in the other case x = 180. What differencewould you expect between choices with the two values of x?a. Higher choices when x = 5.b. Higher choices when x = 180.c. Little or no difference.d. Impossible to predict.2. Consider these statements about communication in experiments.1. Chat communication is usually more effective than written simple signals (A,B, etc.).2. Friendly appeals to mutual interest and payoff dominance are effective.3. Promises often affect beliefs and actions.4. A promise is not worth the paper it is printed on.Which of these are true?a. 1 and 2b. 1 and 3c. 2 and 3d. 1, 2, and 33. A treasure is hidden under one of the four boxes below. A person gets twoguesses to find the treasure. What do you think is the most…