Ed Has 100 Tons of Manure

question 10

Multiple Choice

Ed has 100 tons of manure.The lowest price at which he is willing to sell it is $10 per ton.Fred wants to buy 100 tons of manure.The most he is willing to pay is $8 per ton.The federal government offers to subsidize manure sales at a rate of $1 per ton.If Ed and Fred are the only people who deal in manure, then the deadweight loss caused by the subsidy is

• A)$100.
• B)$50.
• C)$0.
• D)$200.
• E)none of the above.

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Definitions:

Simple Random Sampling

A sampling method where each member of a population has an equal probability of being selected into the sample.

Sample Mean

The sample mean is the average value of a sample of data, calculated by summing all data points and dividing by the number of points.

Random Variable

A variable whose values depend on outcomes of a probabilistic phenomenon.

Population Mean

The average of a set of values or measurements in the entire population.