# Microeconomics

ADVANCED ANALYSIS Assume the following values for Figures 5.4a and Figures 5.4b. Q1 = 20 bags. Q2 = 15 bags. Q3 = 27 bags. The market equilibrium price is \$45 per bag. The price at a is \$85 per bag. The price at c is \$5 per bag. The price at f is \$59 per bag. The price at g is \$31 per bag. Apply the formula for the area of a triangle (Area = Base Height) to answer the following questions. LO2 a. What is the dollar value of the total surplus (producer surplus plus consumer surplus) when the allocatively efficient output level is being produced? How large is the dollar value of the consumer surplus at that output level? b. What is the dollar value of the deadweight loss when output level Q2 is being produced? What is the total surplus when output level Q2 is being produced? c. What is the dollar value of the deadweight loss when output level Q3 is produced? What is the dollar value of the total surplus when output level Q3 is produced?

1. 0
2. 0
3. 432
1. if you find out B. let me know

1. 0
2. 0
posted by meme
2. ADVANCED ANALYSIS Assume the following values for the figures below: Q1 = 20 bags. Q2 = 15 bags. Q3 = 27 bags. The market equilibrium price is \$45 per bag. In Figure (a), the price at point a is \$85 per bag. The price at point c is \$5 per bag. The price at point d is \$55 per bag, and the price at point e is \$35 per bag. In Figure (b), the price at point f is \$59 per bag. The price at point g is \$31 per bag. Values for points a, b, and c are the same as in Figure (a). Apply the formula for the area of a triangle (Area = ½ × Base × Height) to answer the following questions.

1. 0
2. 0
posted by ANA
3. Explanation:
a. Total surplus is the area bounded by points a, b, and c. To calculate total surplus, we use the following formula for the area of a triangle: Area = ½ × Base × Height. The area between the demand curve and the supply curve for the quantity ranging from 0 to 20 is the total economic surplus. This is a triangle with a base (best read off the price axis) of \$80, which is the price difference at Q = 0, or between points a and c, and a height of 20 (the number of units purchased in equilibrium). Using these values, we have a total surplus of (1/2) × \$80 × 20 = \$800.

The consumer surplus is the area between the demand curve and the equilibrium price line. Here we have a base of \$40 (the price difference between the demand schedule price at Q = 0, which is \$85, and the equilibrium price of \$45). The height of the triangle is once again 20 (the number of units purchased in equilibrium). Using these values, we have a consumer surplus of (1/2) × 40 × 20 = \$400.

b. Deadweight loss is the difference in total surplus between an efficient level of output Q1 and a reduced level of output at Q2. We can calculate this as the area of a triangle bounded by points bde. The base of this triangle is the difference in prices at points d and e, or \$55 – \$35 = \$20. The height of this triangle is given by the difference in the restricted level of output of Q2 = 15 and the efficient level of output Q1 = 20, or 5 units. Thus, the area of this triangle (the deadweight loss) is equal to (1/2) × \$20 × 5 = \$50. The remaining total surplus can be found by subtracting the deadweight loss from the original (efficient) total surplus. This is \$800 (maximum total surplus) – \$50 (deadweight loss) = \$750.

c. The deadweight loss from overproduction is the difference in total surplus between an efficient level of output Q1 and an additional level of output at Q3. We can calculate this as the area of a triangle bounded by points bfg. The base of this triangle is the difference in prices at points f and g, or \$59 – \$31 = \$28. The height of this triangle is given by the difference in the additional level of output Q3 = 27 and the efficient level of output Q1 = 20, or 7 units. Thus, the area of this triangle (the deadweight loss) is equal to (1/2) × \$28 × 7 = \$98. The remaining total surplus can be found by subtracting the deadweight loss from the original total surplus. This is \$800 (maximum total surplus) – \$98 (deadweight loss) = \$702. Note here that we maximize total (producer + consumer) surplus by producing the equilibrium quantity, but we lose surplus from overproduction (inefficient use of resources).

1. 0
2. 0
posted by ANA
4. B is wrong

1. 0
2. 0
posted by dingledong
5. A. \$800, \$600
B. \$50, \$750
C. \$98, \$702

1. 0
2. 0
posted by Bailey

## Similar Questions

1. ### physics online

Assuming that Albertine's mass is 60.0 , what is , the coefficient of kinetic friction between the chair and the waxed floor? Use = 9.80 for the magnitude of the acceleration due to gravity. Assume that the value of found in Part

asked by baby on October 20, 2010
2. ### Chemistry

Hi guys! I just learned about significant figures today, and I have a question about them. My teacher gave us a problem where all values have what I think is four significant figures (like 44.56) except the value for temperature

asked by Allie on September 9, 2015
3. ### phsics

Assuming that Albertine's mass is 60.0kg , what is μk, the coefficient of kinetic friction between the chair and the waxed floor? Use g = 9.80m/s2 for the magnitude of the acceleration due to gravity. Assume that the value of k

asked by jame on December 12, 2014
4. ### General Paper

"Do we expect too much from public figures?" I wrote an introduction. I agree to the question raised. Please take a look at the introduction I wrote and also comment on my draft for the next few body paragraph. I have yet add in a

asked by Sing on January 31, 2015
5. ### math

hiram studied the 6 solid figures.he sorted them into 2 group of 3 figures.the figures in each group belong together for certain reasons .try to figure out hiram sorting plan. explain why the figures go together.

asked by sara on December 15, 2009
6. ### math

1. Mr.Lim gave 3600 to his wife and two children altogether. His wife received \$500 more than his son. His son received twice as much his daughter. How much did Mr. Lim's wife receive? 2. There were 4342 buttons altogether in

asked by odette on July 31, 2017
7. ### Math

Luis had 135 action figures, sam had 990 action figures and jane had 570 action figures. After Jane gave an equal number of action figures to both boys, sam had 4 times as many action figures as Luis. How many action figures did

asked by Russ on July 5, 2018
8. ### math

Louis had 135 action figures, Sam had 990 action figures and Jane had 570 action figures. after jane gave an equal number of action figures to both boys, Sam had 4 times as many action figures as Louis. How many action figures did

asked by Anonymous on August 9, 2017
9. ### ANALYTICAL CHEMISTRY

Explain the following statement: "The validity of a chemical analysis ultimately depends on measuring the response of the analytical procedure to known standards." (b) Calibration curves are necessary in many chemical measurements

asked by KAMBOYI KAMBOYI on March 14, 2016
10. ### Chemistry

The question asks me to find the absolute error using the true value=.1025M, and the mean=.1077 The answer I got was .0052...how would I convert this to 4 significant figures? (since the values have 4 significant figures)

asked by kristine on September 29, 2013

More Similar Questions