Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 7, Problem 8PA
To determine
The equilibrium price and the quantity of haircuts and total surplus.
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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
.
"…two prostitutes came to the king (Solomon) and stood before him. One of them said, ‘My lord, this woman and I live in the same house. I had a baby while she was there with me. The third day after my child was born, this woman also had a baby. We were alone; there was no one in the house but the two of us.
During the night this woman's son died because she lay on him. So she got up in the middle of the night and took my son from my side while I your servant was asleep. She put him by her breast and put her dead son by my breast. The next morning, I got up to nurse my son— and he was dead! But when I looked at him closely in the morning light, I knew that it wasn't the son I had borne.'
The other woman said, ‘No! The living one is my son; the dead one is yours.'
The king said, ‘Bring me a sword.' So they brought a sword for the king. He then gave an order: ‘Cut the living child in two and give half to one and half to the other.'
The woman whose son was alive was filled with compassion…
Chapter 7 Solutions
Principles of Microeconomics
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