When the market for gasoline in Motorland is in equilibrium, the ...

[PhilipSeeMore]

When the market for gasoline in Motorland is in equilibrium, the deadweight loss is
 
  A) 37,500 per month.
  B) 150,000 per month.
  C) 75,000 per month.
  D) zero.

Question 2

The figure above shows the market for polio vaccination in Africa.
 
  a) If the market is competitive and left unregulated, how many doses of vaccine will be administered?
  b) If the Melinda and Bill Gates Foundation underwrites the cost of the vaccine by paying for a large fraction of the preparation and delivery cost, what will happen to the number of doses administered? Why?

[Ahernandez18]

Answer to Question 1

C

Answer to Question 2

a) If the market is competitive and left unregulated, 4 million doses will be administered.
b) If the Foundation underwrites the cost of the vaccine, the marginal cost of the vaccine will drop. The result will be similar to a government subsidy: part of the price of the vaccine will be paid for by the Foundation.. The market's efficiency will be increased.

[PhilipSeeMore]

Correct answers!

[Ahernandez18]

Great! Please up vote