John has a marginal benefit of $7 for 1 slice of pizza, $5 for a second slice, $3 for a third slice, $1 for a fourth slice, and $0.50 for a fifth slice. The price of pizza is $1.50 per slice. Which of the following statements is correct?
A) John will purchase 3 slices of pizza and have consumer surplus of $10.50.
B) John will purchase 4 slices of pizza and have consumer surplus of $12.00.
C) John will purchase 2 slices of pizza and have consumer surplus of $1.50.
D) John will purchase 3 slices of pizza and have consumer surplus of $4.50.
E) John will purchase 2 slices of pizza and have consumer surplus of $3.00.
A
You might also like to view...
Which of the following episodes would most likely contain an externality?
A) You cannot afford to buy groceries. B) You decide to grow your own vegetables in your backyard where no one else can see them. C) You decide to grow flowers in your front yard where everyone else can see them. D) You eat all the vegetables you grow yourself.
Consider an economy where the only goods traded are coconuts and pineapples. Last year, 100 coconuts were sold at €1 apiece, and 200 pineapples were sold at €2.50 apiece. If the money supply was €100, what was velocity?
A. 30 B. 15 C. 6 D. 5
Suppose a radar-activated braking system that can help prevent crashes is an option on a new car. It costs $600 and reduces the chance of dying in an auto accident by 1/700. The implicit value placed on life by a person who does not have the system installed is therefore:
A. exactly $600. B. at least $420,000. C. at least $432,000. D. less than $420,000.
Assume a lawyer signs a contingency fee contract with a plaintiff. The case ends up settling for $1 million, of which the plaintiff received $800,000. It is obvious this contract was efficient
A) True, the plaintiff received some money. B) False, it is not clear whether another lawyer would have settled for more. C) False, it is not clear whether the plaintiff's lawyer is very smart. D) True, the plaintiff and lawyer reached an agreement and both lived up to their end of the agreement.