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FIGURE 1: Efficient Output MSC 2.00 =P Marginal ulit and Cost Kwacha) 1.50 1.00-P MSB Q.10,000 Q - 15,000 Q-20,000 Loaves of Bread per Month
FIGURE 1: Efficient Output MSC 2.00 =P Marginal ulit and Cost Kwacha) 1.50 1.00-P MSB Q.10,000 Q - 15,000 Q-20,000 Loaves of Bread per Month TSC ZTE Total Social Benefit and Cost 158 - TSC Figure 1A graphs the marginal social benefit (MSB) and marginal social cost (MSC) of making various quantities of bread available per month in a nation. Figure 18 shows the total social benefit (TSB) and the total social cost (TSC) of ATSB producing the bread. The marginal social benefit is where TSB is the change in the social benefit of the good and is a one-unit increase in the output of bread per month. The marginal social benefit is measured by the slope of the total social benefit curve at any point. Similarly, the marginal social cost, Page 2 of 5 ATSC AQ is measured by the slope of the total social cost curve at any point Analyse the diagram and answer the following questions. REQUIRED: (A) Explain how can one determine the efficiency of the production of bread from Figure 1A in the diagram? 15 Marks) (B) Looking at the output corresponding to 10,000 loaves of bread per month (0.) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. 15 Marks) (C) What is the net marginal benefit at point in Figure 1A? 3 Marks] (D) Looking at the output corresponding to 20000 loaves of bread per month (0.) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. (5 Marks) (E) What is the net marginal benefit at point , in Figure 1A? 3 Marks (F) Looking at the output corresponding to 15,000 loaves of bread per month (0") in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. 15 Marks (G) What is the net marginal benefit at point * in Figure 1A? 3 Marks) (H) Explain how can one determine the efficiency of the production of bread from Figure 18, in the diagram? 15 Marks) (1) Why doesn't the equality of Total Social Benefits to Total Social Costs of making bread in the Figure 1B bring about efficiency? 16 Marks) FIGURE 1: Efficient Output MSC 2.00 =P Marginal ulit and Cost Kwacha) 1.50 1.00-P MSB Q.10,000 Q - 15,000 Q-20,000 Loaves of Bread per Month TSC ZTE Total Social Benefit and Cost 158 - TSC Figure 1A graphs the marginal social benefit (MSB) and marginal social cost (MSC) of making various quantities of bread available per month in a nation. Figure 18 shows the total social benefit (TSB) and the total social cost (TSC) of ATSB producing the bread. The marginal social benefit is where TSB is the change in the social benefit of the good and is a one-unit increase in the output of bread per month. The marginal social benefit is measured by the slope of the total social benefit curve at any point. Similarly, the marginal social cost, Page 2 of 5 ATSC AQ is measured by the slope of the total social cost curve at any point Analyse the diagram and answer the following questions. REQUIRED: (A) Explain how can one determine the efficiency of the production of bread from Figure 1A in the diagram? 15 Marks) (B) Looking at the output corresponding to 10,000 loaves of bread per month (0.) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. 15 Marks) (C) What is the net marginal benefit at point in Figure 1A? 3 Marks] (D) Looking at the output corresponding to 20000 loaves of bread per month (0.) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. (5 Marks) (E) What is the net marginal benefit at point , in Figure 1A? 3 Marks (F) Looking at the output corresponding to 15,000 loaves of bread per month (0") in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. 15 Marks (G) What is the net marginal benefit at point * in Figure 1A? 3 Marks) (H) Explain how can one determine the efficiency of the production of bread from Figure 18, in the diagram? 15 Marks) (1) Why doesn't the equality of Total Social Benefits to Total Social Costs of making bread in the Figure 1B bring about efficiency? 16 Marks)
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