1.You are willing to pay $3,000 to have your windows covered, and Tom’s marginal cost of covering windows is $2,500. If you agree to split the difference, the price is , your consumer surplus is , and Tom’s producer surplus is
.
2. In Figure 21.3 on page 466, Forest is willing to pay
for the fourth cut lawn, and Dee’s marginal cost is
. If they split the difference, the price would be
and each would get a surplus of
.
fig . 21.3
3. In Figure 21.4 on page 466, a maximum price of $4 prevents mutually beneficial transactions between Thurl and
and between Forest and
.
fig. 21.4
4. Fill in the blanks with “consumers” or “producers”: A maximum price below the equilibrium price generates benefits for some
and imposes costs on some and some
.
5.Fill in the blanks with “consumers” or “producers”: A minimum price above the equilibrium price generates benefits for some and imposes costs on some
and some
.
6. In Figure 21.3 on page 466, the sixth lawn is not cut because the
of the sixth consumer (Siggy, in Figure 21.1) is the of the
sixth producer (Efrin, in Figure 21.2).
fig. 21.3
fig. 21.2
fig.21.1
7.Under rent control, the government sets a price for housing, which
the quantity supplied and the total value of the market. (Related to Application 2 on page 468.)