demand schedules for train travel
The table provides information on the demand schedules for train travel for Ann, Beth, and Cy, who are the only buyers in the market.
|Price (dollars per kilometre)||Quantity demanded (kilometre)|
a. Construct the market demand schedule.
b. What are the maximum prices that Ann, Beth, and Cy are willing to pay to travel 20 kilometres? Why?
c. What is the marginal social benefit when the total distance travelled is 60 kilometres?
d. What is the marginal benefit for each person when they travel a total distance of 60 kilometres and how many kilometres does each of the people travel?
e. What is each traveler’s consumer surplus when the price is $4 a mile?
f. What is the market consumer surplus when the price is $4 a kilometre?
The table provides information on the supply schedules of hot air balloon rides by Xavier, Yasmin, and Zack, who are the only sellers in the market.
|Price (dollars per ride)||Quantity supplied (rides per week)|
a. Construct the market supply schedule.
b. What are the minimum prices that Xavier, Yasmin, and Zack are willing to accept to supply 20 rides? Why?
c. What is the marginal social cost when the total number of rides is 30?
d. What is the marginal cost for each supplier when the total number of rides is 30 and how many rides does each of the firms supply?
e. What is each firm’s producer surplus when the price is $70 a ride?
f. What is the market producer surplus when the price is $70 a ride?
Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and materials cost $20,000 per year. Gomez has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. Gomez has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate accounting profits and economic profits for Gomez’s pottery.
The demand and supply schedules for rice are given in the table.
|Price (dollars per box)||Quantity demanded||Quantity supplied|
||(boxes per week)|
What are the price, the marginal cost of producing rice, and the quantity produced if the government
a. Sets a production quota for rice of 2,000 boxes a week?
b. Introduces a subsidy to rice growers of $0.30 a box?
The following figure illustrates the market for rental housing.
a. What are the equilibrium rent and equilibrium quantity of rental housing?
If a rent ceiling is set at $600 a month, what is
b. The quantity of housing rented?
If a rent ceiling is set at $300 a month, what is
c. The quantity of housing rented?
d. The shortage of housing?
e. The maximum price that someone is willing to pay for the last unit of housing available?