To maximize total surplus, a benevolent social planner would choose which of the

Question

To maximize total surplus, a benevolent social planner would choose which of the following outcomes? Q = 30 and P = 30 Q = 30 and P = 60 Q = 45 and P = 45 Q = 60 and P = 30 If the price elasticity of demand for a good is 0.8, then which of the following events is consistent with a 4 percent decrease in the quantity of the good demanded? a 5 percent increase in the price of the good a 3.2 percent increase in the price of the good a 4.8 percent increase in the price of the good a 0.2 percent increase in the price of the good If marginal cost is equal to average total cost, then marginal cost is minimized, average total cost is minimized, average variable cost is minimized, marginal cost is zero. The cost of producing an additional unit of output is the firm's marginal cost. productivity offset. variable cost. average variable cost. Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer? $300. $1,700. $2,000. $2,300.

Explanation / Answer

b. Where MC = MR a. e = %age change in Q / % change in P. % change in P =%age change in Q / e => 4/ 0.8 => 5 b. MC intersects ATC at its minimum a b. P rice = Maximum Willingness to pay - consumer surplus => 2000-300 = 1700

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