ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
14th Edition
ISBN: 9781337912396
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 11, Problem 2TY
To determine
The consumer surplus.
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The figure shows the demand curve for pizza. A) What is the 4 point marginal benefit of pizza number 20? B) What is the maximum price that the consumer wants to pay for pizza number 20? C) If the price of a pizza is $6, what is the consumer surplus for the 20th pizza? d) If the price of a pizza is $10, what is the consumer surplus? e) If the price of a pizza is $6, what is the consumer surplus?
An important class of externalities to which attention has recently been directed is called
information externalities. The information produced by one individual or firm generates benefits
for others. The success of an oil well on one tract of land increases the likelihood of oil's being
found on an adjacent tract, and hence increases the value of that tract.
a) Can you think of other examples of information externalities?
b) What are the likely consequences of information externalities for the efficiency of resource
allocations?
c) Discuss the possibilities of private market solutions to these problems.
A market is described by the following supply and demand curves:
Supply: P=0.25Q Demand: P=300-0.75Q
(a) Solve for the equilibrium price and quantity and calculate the total economic surplus with a diagram.
Chapter 11 Solutions
ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
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