Scenario: the Table Below Shows the Reservation Values of Ten

question 229

Multiple Choice

Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves.

-Refer to the scenario above.Suppose that the government forces the seller to sell 10 loaves,each at its marginal cost,to the government.Then the government sells the 10 loaves to buyers,one for each buyer,at their reservation values.Who gets the social surplus?

• A) Buyers
• B) The seller
• C) Government
• D) Nobody. The social surplus is the deadweight loss.

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Definitions:

Pearson r

A measure of the linear correlation between two variables, ranging from -1 to 1, where 1 means a perfect positive linear relationship, -1 a perfect negative linear relationship, and 0 no linear relationship.

Number of Victimizations

The count or tally of instances in which individuals or entities are harmed or affected adversely, typically used in criminological and sociological research.

Scatterplots

A graph in which two variables are plotted along two axes, the pattern of the resulting points revealing any correlations.

Regression Equation

An equation that represents the relation between a dependent variable and one or more independent variables, used to predict the dependent variable.