Answers to chapter 6

Answers to chapter 6 - Solutions to End-of-Chapter...

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Solutions to End-of-Chapter Exercises Chapter 6 [21] Section 6.1 [21.1]: Consumer Surplus and Producer Surplus 1.1 highest price the consumer is willing to pay, market price 1.2 market price, lowest price the seller is willing to accept 1.3 9, 6 1.4 6, 2 1.5 decreases, increases 1.6 larger 1.7 larger Section 6.2 [21.2]: Market Equilibrium and Efficiency 2.1 1700, 300, 300 2.2 13, 8, $10.50, $2.50 2.3 Cecil, Dee 2.4 consumers, producers, consumers 2.5 producers, consumers, producers 2.6 a. A + B + C b. D + E + F c. A + B + C + D + E + F d. A + B + D e. F f. A + B + D + F g. A h. B + D + F i. A + B + D + F Section 6.3 [21.3]: Controlling Prices -- Maximum and Minimum Prices 3.1 down arrow, down arrow, up arrow, down arrow 3.2 300, a, c, a, b 3.3 700, 850 3.4 $175 3.5 $350, $50 3.6 a. b. 125, 92, 33 3.7 a. Supply is perfectly inelastic. 74
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75 Chapter 6 b. c. Supply is not perfectly inelastic. 3.8 a. Quantity equals 70 visits and surplus falls to $300. b. Inefficiencies include lower quality health care and fewer doctors. c. Doctors and patients are likely to circumvent the legal maximum price.
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Market Efficiency and Government Intervention 76 3.9 a.
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