Suppose Ernie is the only seller in the market for bottled water and Bert is the only buyer. The following lists show the value
Bert places on a bottle of water and the cost Ernie incurs to produce each bottle of water:
Bert's Value
Value of first bottle: $7
Value of second bottle: $5
Value of third bottle: $3
Value of fourth bottle: $1
Ernie's Costs
Cost of first bottle: $1
Cost of second bottle: $3
Cost of third bottle: $5
Cost of fourth bottle: $7
The following table shows their respective supply and demand schedules:
Price Quantity Supplied Quantity Demanded
More than $7 4 0
$5 to $7 3 1
$3 to $5 2 2
$1 to $3 1 3
$1 or less 0 4
Use Ernie's supply schedule and Bert's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table.
Price Quantity Supplied Quantity Demanded
2
4
6
A price of brings supply and demand into equilibrium.
At the equilibrium price, consumer surplus is, producer surplus is, and total surplus is.
If Ernie produced and Bert consumed one less bottle of water, total surplus would .
If instead, Ernie produced and Bert consumed one additional bottle of water, total surplus would .
Bert's Value
Value of first bottle: $7
Value of second bottle: $5
Value of third bottle: $3
Value of fourth bottle: $1
Ernie's Costs
Cost of first bottle: $1
Cost of second bottle: $3
Cost of third bottle: $5
Cost of fourth bottle: $7
The following table shows their respective supply and demand schedules:
Price Quantity Supplied Quantity Demanded
More than $7 4 0
$5 to $7 3 1
$3 to $5 2 2
$1 to $3 1 3
$1 or less 0 4
Use Ernie's supply schedule and Bert's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table.
Price Quantity Supplied Quantity Demanded
2
4
6
A price of brings supply and demand into equilibrium.
At the equilibrium price, consumer surplus is, producer surplus is, and total surplus is.
If Ernie produced and Bert consumed one less bottle of water, total surplus would .
If instead, Ernie produced and Bert consumed one additional bottle of water, total surplus would .
1 answer:
Your <em>question is not clear enough</em>. However it could be inferred you want details plotted out of the supply and demand schedule as outlined in attached image.
<u>Explanation:</u>
- From the information in the attached image only a price of $4 brings supply and demand into equilibrium, with an equilibrium quantity of 2.
- Also at a price of $4, consumer surplus is $4 and producer surplus is $4. Total surplus is $4+$4=$8.
- The law of diminishing returns applies here and so If Ernie produced one fewer bottle, his producer surplus would decline to $3. If Bert consumed one fewer bottle, his consumer surplus would decline to $3. So total surplus would decline to $3+$3=$6.
- Finally, when Ernie produced one additional bottle of water, his cost would be $5, From Ernie's supply schedule and Bert's demand schedule, the quantity demanded and supplied is only $4, so his producer surplus would decline by $1. If Bert consumed one additional bottle of water, his value would be $3, but the price is $4, so his consumer surplus would decline by $1. So total surplus declines by $1+$1 = $2.
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Answer:
0 units of plants and 18 animals.
Explanation:
From the information provided, we know that this population must hunt at least 8 animals, to obtain the hides necessary to survive. When hunting such a quantity of animals, they would also obtain 160 units of energy and 200 units of protein. In terms of costs, this equals 80 hours of labor.
How can the population obtain the additional 200 units of energy and 100 of protein they need to live? They have two options: gather plants or keep hunting animals, of course, respecting the available quantities.
In the former case, at least 10 units of a plant would have to be gathered, this is the only way to obtain the additional units of energy and protein they are looking for. With 8 animals and 10 units of plants, they would have 460 units of energy, 300 of protein and 8 hides, and would have to invest 280 hours of labor.
If the population decided to reduce labor by gathering fewer plants (which is the activity that requires more time) but hunting the same amount of animals, it would obtain 430 units of energy, 290 units of protein and 8 hides. That means that it would not survive because it would not meet the requirement of 300 proteins.
Therefore, the only way to reduce hours of labor without risking survival would be gathering fewer plants but hunting more animals. Following this logic, the optimal amount would be 18 animals and 0 units of plants, as this would allow people to obtain the necessary resources to survive at the minimum cost in terms of labor. Furthermore, it would fit the physical limit of 27 units of plants and 23 animals. This combination would allow to obtain 360 units of energy, 450 of protein and 18 hides by investing only 180 hours of labor.
The attached image shows what happens when the quantity of animals is increased and that of plants is decreased until reaching the optimal combination of 18 animals and no units of plants.
