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Unformatted text preview: Homework on Chapter 7 1. Consider the definition of Pareto efficiency.
P r ic e ( $ /lb ) 16 14 12 10 8 6 4 2 0 D 5 10 15 20 25 30 35 40 45 Q ( lb s /d a y ) S Supply and Demand Curve Shrimp in Hicksville 2. a. At the quantity of 10 lbs. per day, the marginal buyer values an extra lb of shrimp at ____. b. Suppose that the quantity initially being purchased is 10 lbs. per day. If the supplier sells an extra pound of shrimp to the most eager\buyers for $8, then the seller is _____ better off than before and the buyer is______ better off than before. 3. Based on demand curve D and supply curve S, the dollar value of the consumer surplus is 4. Based on demand curve D and supply curve S, the dollar value of the producer surplus is 5. The more elastic demand is, the ______ the burden of the tax borne by ______. ...
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