Answered step by step
Verified Expert Solution
Question
1 Approved Answer
(a) Jason needs help getting ready for the next test in his economics course and would like to hire Maria, an economics tutor to help
(a) Jason needs help getting ready for the next test in his economics course and would like to hire Maria, an economics tutor to help him. Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third $15 for the fourth, and $10 for the fifth The equilibrium price for tutoring is $15 per hour. For how many hours of tutoring will Jason hire Maria? Why this amount of hours? What is Jason's consumer surplus, if any, from the tutoring? What is Mania's consumer surplus from the tutoring? (6 Marks) (b) Consider three ways of helping poor people to buy food, clothing and shelter. The first way is to pass laws setting price ceilings to keep these basic goods affordable. The second is to have the government distribute coupons that give poor people a discount when they buy these necessities. The third is for the government to distribute income to poor people. Which program is more likely to have an efficient outcome? Describe why the other programs are not likely to be efficient. (6 Marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started