Homework Answers
Answer 8) Yes
Explanation : Since the good is non excludable and non rival , it is a public good. In such goods problems of free rider arises which leads go market failure .This is the reason for a third party intervention such as government is needed for optimum allocation.
Answer 9)
Total surplus is maximised when
Total marginal benefit = Marginal cost
Marginal benefit of Jill + marginal benefit of Sam = marginal cost
| Quantity | TOTAL COST | MB to Sam | MB to Jill | Marginal cost | MB of jill + MB of Sam |
| 0 | 0 | - | - | 0 | - |
| 1 | 12 | 12 | 14 | 12 | 26 |
| 2 | 24 | 8 | 12 | 12 | 20 |
| 3 | 36 | 6 | 10 | 12 | 16 |
| 4 | 48 | 4 | 8 | 12 | 12 |
| 5 | 60 | 2 | 6 | 12 | 8 |
How many units of goods should be provided of our goal is to maximise profit ?
Answer : 4 units
The efficient quantity of public good is the quantity that has highest possible marginal benefit
Answer : No
Explanation : Allocation is efficient when total marginal benefit , which is obtained by horizontal summation of individual marginal benefits = marginal cost.
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Q8 (1 point). The table below describes the total costs and marginal benefits of varying quantities...
Q11 (1 point). Tom and Jerry are the only members of society. The table below shows...
Q11 (1 point). Tom and Jerry are the only members of society. The table below shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the fourth satellite? O $36. O $20. O $18. O $4. Q MB to Tom MB to Jerry 0 1 50 40 2 40 32 3 30 24 4 20 16 5 10 8 Q12 (1 point). Tom and Jerry are the only members of society. The...
Q4 (1 point). The figure below shows the marginal social benefit, marginal private cost and marginal...
Q4 (1 point). The figure below shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. If the market is competitive and unregulated, how much steel will be produced? oo tons O 2 tons О 4 tons O 8 tons 250 MSC 6200 S = MC Price and cost (dollars per ton of steel) 150 100 50 o 2 D- MSB 6 8 10 Quantity (tons of steel per week) Activate Windows Go to Settings...
1. The graph below shows marginal cost, marginal revenue, and average total cost for a company...
1. The graph below shows marginal cost, marginal revenue, and average total cost for a company operating in a perfectly competitive market. In the short-run, the company maximizes profit by producing at point E. Is the company productively efficient? Explain. 16 Marginal cost 14 12 10 Marginal Cost/Marginal Revenue ($) 8 6 E Average cost Marginal revenue 4 2 C' 0 0 20 40 100 120 140 60 80 Quantity
Total, average, and marginal physical product
4. Total, average, and marginal physical productUndercover World, a book shop, has the following marginal physical product curve (labeled MPPMPP) for its hourly production.AP01234520181614121086420MPP and AP (Books per hour)QUANTITY OF LABORMPPWhen labor increases from three to four workers, total product increases by per hour.Use the orange points (square symbol) to plot the total physical product curve (TPP) on the following graph. Line segments will automatically connect the points. Assume that if there are no workers, Undercover World does not have any...
The graph on the right shows the demand, marginal revenue, marginal cost, and average total cost...
The graph on the right shows the demand, marginal revenue, marginal cost, and average total cost curves for a monopolist. Show the impact if this firm was regulated to charge the fair-returns price? On graph 2: 1.) Using the point drawing tool, place a point at the output and price combination that would result from regulation if the monopoly was required to charge the fair-returns price. 2.) Using the triangle drawing tool, indicate the deadweight loss that would result from...
Question 8 1 pts The following table shows Total Utility data for products Land M. Assume...
Question 8 1 pts The following table shows Total Utility data for products Land M. Assume that the price of Lis $2 each and the price of Mis $4 each and that the consumer's income is $24. What quantities of Land M should be purchased to maximize total utility? Units of L 1 1 2 3 4 5 Total Utility 9 15 18 20 21 Units Total of M Utility 16 2 28 3 36 4 40 5 42 4...
Table 14-12 Bill's Birdhouses COSTS REVENUES Quantity Total Produced Cost Marginal Quantity Cost Demanded Price Total...
Table 14-12 Bill's Birdhouses COSTS REVENUES Quantity Total Produced Cost Marginal Quantity Cost Demanded Price Total Marginal Revenue Revenue $0 $80 $50 $102 a wo $157 $217 $80 Ca W NA $285 $365 $80 $462 $80 $582 Refer to Table 14-12. What is the total revenue from selling 4 units? $320 5137 $480 $80 Question 3 Refer to Table 14-12 (above in Q2). What is the average revenue when 4 units are sold? $0 $68 $400 $80 Question 4 Refer...
e. Fill in the following table on the total and marginal utilities ofa certain good, product...
e. Fill in the following table on the total and marginal utilities ofa certain good, product A. use your results to answer f, g, h, i Quantity of Product A Total Utility Marginal Utility 0 20 1 35 10 4 0 45 6 7 35 -15 8 f.When should a reasonable person stop consuming product A? Explain. g.Graph the total utility and marginal utility together on the same graph. h.Explain the relationship between TU and MU. TU is at its...
The table below presents the demand schedule and marginal costs facing a monopolist producer. TR ($)...
The table below presents the demand schedule and marginal costs facing a monopolist producer. TR ($) MR ($) MC($) Q 0 P($) 14 | | 13 2 12 4 10 6 181 8 6 9 5 10 4. T T Instructions: Round your answers to the nearest whole number and include a negative sign if appropriate. Leave no cells blank. Enter O if appropriate. a. Fill in the total revenue and marginal revenue columns. b. What is the profit-maximizing level...
The table below shows part of the cost structure (total fixed cost, total variable cost, and...
The table below shows part of the cost structure (total fixed cost, total variable cost, and total cost) for a typical producer of olive oil -- a perfectly competitive industry. Copy the table into Excel and use it to calculate average total cost and marginal cost for all quantities from 1 to 10. Use Excel (following the hints in QSet 2, #9) to produce a diagram of the firm’s average total cost and marginal cost curves. If the price of...
Q11 (1 point). Tom and Jerry are the only members of society. The table below shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the fourth satellite? O $36. O $20. O $18. O $4. Q MB to Tom MB to Jerry 0 1 50 40 2 40 32 3 30 24 4 20 16 5 10 8 Q12 (1 point). Tom and Jerry are the only members of society. The...
Q4 (1 point). The figure below shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. If the market is competitive and unregulated, how much steel will be produced? oo tons O 2 tons О 4 tons O 8 tons 250 MSC 6200 S = MC Price and cost (dollars per ton of steel) 150 100 50 o 2 D- MSB 6 8 10 Quantity (tons of steel per week) Activate Windows Go to Settings...
1. The graph below shows marginal cost, marginal revenue, and average total cost for a company operating in a perfectly competitive market. In the short-run, the company maximizes profit by producing at point E. Is the company productively efficient? Explain. 16 Marginal cost 14 12 10 Marginal Cost/Marginal Revenue ($) 8 6 E Average cost Marginal revenue 4 2 C' 0 0 20 40 100 120 140 60 80 Quantity
The graph on the right shows the demand, marginal revenue, marginal cost, and average total cost curves for a monopolist. Show the impact if this firm was regulated to charge the fair-returns price? On graph 2: 1.) Using the point drawing tool, place a point at the output and price combination that would result from regulation if the monopoly was required to charge the fair-returns price. 2.) Using the triangle drawing tool, indicate the deadweight loss that would result from...
Question 8 1 pts The following table shows Total Utility data for products Land M. Assume that the price of Lis $2 each and the price of Mis $4 each and that the consumer's income is $24. What quantities of Land M should be purchased to maximize total utility? Units of L 1 1 2 3 4 5 Total Utility 9 15 18 20 21 Units Total of M Utility 16 2 28 3 36 4 40 5 42 4...
Table 14-12 Bill's Birdhouses COSTS REVENUES Quantity Total Produced Cost Marginal Quantity Cost Demanded Price Total Marginal Revenue Revenue $0 $80 $50 $102 a wo $157 $217 $80 Ca W NA $285 $365 $80 $462 $80 $582 Refer to Table 14-12. What is the total revenue from selling 4 units? $320 5137 $480 $80 Question 3 Refer to Table 14-12 (above in Q2). What is the average revenue when 4 units are sold? $0 $68 $400 $80 Question 4 Refer...
e. Fill in the following table on the total and marginal utilities ofa certain good, product A. use your results to answer f, g, h, i Quantity of Product A Total Utility Marginal Utility 0 20 1 35 10 4 0 45 6 7 35 -15 8 f.When should a reasonable person stop consuming product A? Explain. g.Graph the total utility and marginal utility together on the same graph. h.Explain the relationship between TU and MU. TU is at its...
The table below presents the demand schedule and marginal costs facing a monopolist producer. TR ($) MR ($) MC($) Q 0 P($) 14 | | 13 2 12 4 10 6 181 8 6 9 5 10 4. T T Instructions: Round your answers to the nearest whole number and include a negative sign if appropriate. Leave no cells blank. Enter O if appropriate. a. Fill in the total revenue and marginal revenue columns. b. What is the profit-maximizing level...
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