Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 125

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following:
-a private cost of $3.10;
-a social cost of $3.55;
-a value to consumers of $3.70.
-Refer to Scenario 10-1. Let QMARKET represent the equilibrium quantity of gasoline, and let QOPTIMUM represent the socially optimal quantity of gasoline. Which of the following inequalities is correct?

• A) 1,000 < QOPTIMUM < QMARKET
• B) QOPTIMUM < 1,000 < QMARKET
• C) QMARKET < 1,000 < QOPTIMUM
• D) QOPTIMUM < QMARKET < 1,000

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Definitions:

Shopping Mall

A large indoor retail complex containing various shops, restaurants, and sometimes entertainment facilities, designed for shopping convenience.

Empathy

Being able to grasp and experience someone else's emotional state from their point of view.

Older Woman

An older woman typically refers to a female who has reached a mature stage in life, often associated with advanced age or elderly status.

Altruism

Altruism is the selfless concern for the well-being of others, often manifested through acts of kindness or charity without the expectation of personal gain.