Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 7, Problem 8PA
To determine
The
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There are four consumers willing to pay the following amounts for haircuts, and there are four haircutting businesses with the following costs:
Consumers' Willingness to Pay
Eric:
$35
Bob:
$50
Cho:
$40
Ginny:
$25
Firms' Costs
Firm A:
$25
Firm B:
$40
Firm C:
$30
Firm D:
$45
Each firm has the capacity to produce only one haircut.
For efficiency, should be given.
Which businesses should cut hair? Check all that apply.
Firm A
Firm B
Firm C
Firm D
Which consumers should have their hair cut? Check all that apply.
Bob
Cho
Eric
Ginny
The maximum possible total surplus is
There are four consumers willing to pay the following amounts for haircuts, and there are four haircutting businesses with the following costs:
Consumers' Willingness to Pay
Hilary:
$35
Maria:
$15
Edison:
$45
Kevin:
$25
Firms' Costs
Firm A:
$40
Firm B:
$20
Firm C:
$10
Firm D:
$30
Each firm has the capacity to produce only one haircut.
For efficiency, should be given.
Which businesses should cut hair? Check all that apply.
Firm A
Firm B
Firm C
Firm D
Which consumers should have their hair cut? Check all that apply.
Edison
Hilary
Kevin
Maria
The maximum possible total surplus is
.
Suppose the Environmental Protection Agency (EPA) wants to mandate that all methane emissions must be reduced to zero in order to alleviate global warming in the United States.
Which of the following describes why most economists would disagree with this policy?
Reducing methane emissions is desirable, but whatever levels of pollution firms decide to emit privately are already efficient.
Society would not benefit from lower air pollution.
The environment isn’t worth protecting.
The opportunity cost of zero pollution is much higher than its benefit.
Chapter 7 Solutions
Essentials of Economics (MindTap Course List)
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