Question

Question 7 (1 point) Price of taxi ride $4 60 80 Quantity of taxi rides Refer to the above diagram. If the price of a taxi ride increases from $6 to $8, producer surplus for this taxi driver will (rise, fall) by Include the $ sign and separate your two answers only with a comma and no space. For example, if your answer is" fall by $60.50, show this as fall,$60.50. If your answer is Eighty dollars, show this as $80 (with no decimal or zeros) Question 8 (1 point) Marginal Cost of Production MC 550 300 500 Refer to the above diagram. What is the total cost of producing 500 units of output is? $275,000 $212,500 $150,000 $550

Answer 1

7. Ans: rise, $140

Explanation:

Increase in producer surplus = [($8 - $6) * 60] + 0.5[($8 - $6) * (80 - 60) = 120 + 20 = $140

8. Ans: $212,500

Explanation:

TC = ($300 * 500) + 0.5[($550 - $300) * 500] = 150,000 + 62,500 = $212,500

9. Ans: $180

Explanation:

Producer surplus = 0.5($6 * 60) = $180

10. Ans: $18.75

Explanation:

Total WTP = ($2.50 * 5) + 0.5[($5 - $2.50) * 5] = 12.50 + 6.25 = $18.75

11. Ans: Fewer cartridges would now be be demanded at any given price, which is shown as a leftward shift in the demand curve for cartridges.

Explanation:

Printer and cartridges are complimentary goods. A rise in printer price leads to decrease in quantity demanded of printers and decrease the demand for cartridges. so, demand curve for cartridges will shift leftward.

12. Ans: $6.25

Explanation:

Consumer surplus = 0.5[($5 - $2.50) * 5] = $6.25