Draw the new marginal benefit and marginal cost curves as in Problem 1, part d: 2.. Based on the marginal decision rule, identify the new solution that maximizes the net benefit of study
Trang 1Attributed to Libby Rittenberg and Timothy Tregarthen Saylor.org
cost 140; three hours 210, four hours 280; five hours 350; and six
hours 470
1 Draw the new marginal benefit and marginal cost curves as in
Problem 1, part (d):
2 Based on the marginal decision rule, identify the new solution
that maximizes the net benefit of study time
3 The local gasoline market in a particular city has demand and
supply curves given by the following data (All quantities are in
millions of gallons per month.)
Price per gallon $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00
1 Plot the demand and supply curves, and determine the
equilibrium price and quantity
2 Show the areas of consumer and producer surplus
3 Now suppose that the community determines that each
gallon of gasoline consumed imposes $0.50 in pollution costs
Accordingly, a $0.50-per-gallon tax is imposed The tax is
imposed on sellers of gasoline, and it has the effect of
increasing by $0.50 the price required to induce the quantities
supplied in the table For example, a price of $2.00 is now
required for a quantity of 1 million gallons to be supplied each
month Plot the new supply curve
4 Approximate the new equilibrium price and output
5 Does the price increase by the full amount of the tax? If not,
explain why