The difference between total value and marginal value.

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Chapter 3, Problem 4CQ

To determine

The difference between total value and marginal value.

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Are prices an accurate measure of a good's total value? Are prices an accurate measure of a good's marginal value? What's the difference? Can you think of a good that has a high total value but low marginal value? Use this concept to explain why professional wrestlers earn more than nurses, despite the fact that it is almost certain that nurses create more total value for society than wrestlers.

When excess demand exists for tickets to a major sporting event or a concert, profit opportunities exist for scalpers. The table below indicates the quantities demanded at various prices, fill in the values for the supply curve for tickets to a sold-out venue that holds 20,000 people. Price per Ticket Quantity of Tickets Demanded Quantity of Tickets Supplied 20,000 $50 45,000 100 40,000 20,000 150 35,000 20,000 200 30,000 20,000 250 25,000 20,000 300 20,000 350 15,000 20,000 20,000 The fact that there is a face-value price of $50 per ticket could be illustrated on a graph as a horizontal line at $50 The equilibrium price that will prevail in the market if scalpers are allowed to operate in the black market would be $ 300 per ticket. The quantity of tickets demanded at the face-value price is 45,000 tickets. For this example, a shortage of tickets exists at the face-value price.

The demand and supply curves for beach volleyballs are given by: D = 80-4P S = -2+2P The current price is 19. How much is the excess supply or demand? Write a positive number if you find an excess supply, and write a negative number if you find an excess demand. (round your answer to one decimal place)