Refer to the figure above. What is the social surplus if the ...

[charchew]

Refer to the figure above. What is the social surplus if the market is in equilibrium?
 
  A) 50
  B) 75
  C) 100
  D) 150

Question 2

An individual receives 100 if the outcome of a coin toss is heads. If the outcome of the coin toss is tails, he loses 50. If the individual weights future loses by a special factor of 2, what is the psychological value of this coin toss?
 
  What will be an ideal response?

[jackie]

Answer to Question 1

D

Answer to Question 2

Probability of getting heads = 1/2.
Probability of getting tails = 1/2.
Psychological value of this coin toss = 1/2  100 + 1/2  -(50 )  2 = 50 - 50 = 0.