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# quiz 5 - Georgia State University Principles Macroeconomics...

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Georgia State University Principles Macroeconomics, ECON 2105 Quiz # 5 Key Five multiple choice questions: select the best answer (two points each). 1. The inverse demand and supply of a product are given by P =500 - 1 3 Q and P =50 + 2 3 Q. The net societal benefit at the equilibrium quantity equals \$101,250 . b. \$110,500. c. \$33,750. d. \$122,900. e. none of the above. In this problem from ID, a = 500, m d = 1 3 , from IS, b = 50, and m s = 2 3 . NSB = ( a - b ) 2 2( m d + m s ) = (500 - 50) 2 2 ( 1 3 + 2 3 ) = 450 2 2 = \$101 , 250 . 2. The inverse demand and supply of a product are given by P =50 - 0 . 10 Q P =10 + 0 . 4 Q. The net societal benefit at the equilibrium quantity is a. \$2300. \$1600 . c. \$4450. d. \$550. e. none of the above. In this problem from ID, a = 50, m d = 0 . 1, from IS, b = 10, and m s = - 0 . 4 NSB = ( a - b ) 2 2( m d + m s ) = (50 - 10) 2 2(0 . 1 + 0 . 4) = 40 2 = \$1 , 600 .

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3. The demand and supply of a product are given by Q =5000 - 4 P and Q = - 500 + 5 P. At the nearest dollar, the net societal benefit at the equilibrium quantity is In this problem from the ordinary demand, D = 5000 and M = 4, see the formula sheet, ID P = D M - 1 M Q = 5000 4 - 1 4 Q = 1250 - 0 . 25 Q.
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