SIMON FRASER ECON290 Tut3 answer

SIMON FRASER ECON290 Tut3 answer - Economics 290 Canadian...

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Economics 290: Canadian Microeconomic Policy Tutorial #3 (Week of January 25) 1. The following table shows how the total social benefit and total social cost of summer outdoor concerts in Central City vary with the number of performances. Number of Concerts Total Social Benefits ($) Total Social Costs ($) 1 10,000 8,000 2 15,000 11,000 3 18,000 18,000 4 20,000 26,000 5 21,000 36,000 What is the efficient number of concert? 2. Suppose the marginal social cost of sewage treatment plants each year exceeds their marginal social benefit. Are sewage treatment plants being produced at the efficient level? Why or why not? 3. PM Stephen Harper asked his aids to calculate the total social benefits and the total social costs of national defense. They found that the total social benefits of national defense exceed the total social costs. Does this imply that the funding to the Department of National Defense should be increased to achieve efficiency? Why or why not? 4. Assume the market for coffee is perfectly competitive. Demand is given by Q d =
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