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Author Question: What is the relationship between the marginal social benefit curve and the market demand curve. ... (Read 116 times)

dalyningkenk

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on: Jun 29, 2018
What is the relationship between the marginal social benefit curve and the market demand curve. Explain.
 
  What will be an ideal response?

Question 2

Kirk consumes normal goods. If Kirk's income decreases and the prices of all goods remain unchanged, in his new consumer equilibrium, his marginal utility from each good will ________ and his total utility will ________.
 
  A) increase; increase
  B) increase; decrease
  C) decrease; increase
  D) decrease; decrease


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joshraies

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The market demand curve is also the marginal social benefit curve. The market demand curve shows the maximum price that consumers are willing to pay to buy another unit of the good. Marginal social benefit is the value of one more unit of a good, which equals the maximum price that people are willing to pay to get it. So the market demand curve is the marginal social benefit curve.

Answer to Question 2

B


dalyningkenk

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

raili21

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Reply 3 on: Yesterday
Wow, this really help

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