Question

QUESTION 4 If the price of a good is lower than the equilibrium price: consumer surplus is decreased and deadweight loss is increased. consumer surplus is increased and deadweight loss is decreased. producer surplus is decreased and deadweight loss is increased producer surplus is decreased and deadweight loss is decreased. QUESTION 42 If I get a meningitis vaccination shot, there's a reduced chance that others around me will get meningitis. This is an example of external cost external benefit common resource public good

Answer 1

Q41

Answer

Option 3

The price lower than the equilibrium price reduces the quantity sold

Producer surplus is the area above supply curve and below price and left of the quantity

The decrease in price and decrease in quantity both decreases it

PS=0.5*(P- producer reservation price)*Q

Consumer surplus is the area below demand curve and above price

The price decreases which increases consumer surplus and quantity decreases which decreases consumer surplus so the effect in total is unknown

Deadweight loss is the area between quantities and between demand and supply curve

The quantity change increases so the deadweight loss increases.

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Q42

Answer

Option 2

External benefits

The good is with positive externality so the good provides positive externality.