Pearson eText Microeconomics -- Access Card
2nd Edition
ISBN: 9780136849513
Author: Acemoglu, Daron, Laibson, David, List, John
Publisher: PEARSON
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Question
Chapter 9, Problem 12Q
To determine
The reason behind the vertical summation of individual demand
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If a boxing fight is shown on pay-per-view television every Saturday at 4 p.m., the demand curve for each fight is given in the
accompanying graph.
Cost ($/fight)
25
20
15
10
5
0
10 20 30
40 50
Viewing households (millions)
If there is a pay-per-view charge to watch a fight, the outcome is
----because
efficient; prices will allocate the program to those who value it the most
efficient; the marginal cost of an additional viewing household is zero
O inefficient; the marginal cost of an additional viewing household is zero
O inefficient; television stations would not always make a profit
Suppose there are two residents in a neighborhood, and you know both of their demand curves for a public good. What would you have to do in order to figure out what the social demand curve?
a-Subtract the demand of the person with the higher valuation of the public good from the demand of the person with the lower valuation of the public good
b-Add their demand curves together
c-Multiply the two demand curves together
d-Subtract the demand of the person with the lower valuation of the public good from the demand of the person with the higher valuation of the public good
A company decides to eliminate the pollution it was causing. The result was a “socially efficient level of production, but the cost of production increased. What happens to the equilibrium price and quantity demanded?
The price decreases and the quantity demanded decreases
The price increases and the quantity demanded increases
The price increases and the quantity demanded decreases
The price decreases and the quantity demanded decreases
Chapter 9 Solutions
Pearson eText Microeconomics -- Access Card
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