Suppose Jack Waits in Line and Gets in to See

question 61

Multiple Choice

Suppose Jack waits in line and gets in to see a movie he values at $6, while Sam, farther back in line, does not get to see the movie he values at $12 because the theater fills up. Which of the following statements is true?

• A)The movie theater management needs to install more seats.
• B)Pareto efficiency is a concept that is not applicable here.
• C)Pareto efficiency is achieved because Jack can tell Sam about the movie.
• D)Jack must have stolen his ticket from Sam.
• E)Pareto efficiency is not achieved.

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Definitions:

Quantity Demanded

The total amount of a good that consumers are willing and able to purchase at a given price, holding all other factors constant.

Price Ceiling

A legal maximum price that can be charged for a good or service, usually set by the government.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price in a given period.