Debit cards have replaced check writing in many ways. This is because debit cards, like checks, will take the money directly from your bank account. Unlike credit cards, you must have the money in your account for you to use your debit card. Credit cards allow you to "borrow" money and pay it back later.
Answer:
Given these facts, which state would you expect the price of prostitution services to be higher? Why?
- Since the risks associated to prostitution are higher in New Jersey, we could assume that the price for these services will be higher there. The supply curve of prostitution shift to the left, increasing the price and decreasing the quantity.
Which state would have the higher amount of services consumed (adjusted for population differences)? Why? What are the underlying economic issues of this market?
- Since the price is higher in New Jersey, the quantity demanded will be lower. Also, the risks associated to consuming the service will shift the demand curve to the left, reducing the quantity.
The demand curve for a perfectly competitive firm is completely elastic and a horizontal line. Monopolistically competitive demand curve is downward sloping and is more elastic than monopoly because there are more substitutes.
The deadweight loss is $90.6.
<h3>How to calculate the loss?</h3>
The study suggested that the average recipient's valuation of the gift received was approximately 90% of the actual purchase price of the gift.
This means there's a loss of 10% in value constitute the deadweight loss.
Average amount spent on gift = $906
Percentage loss in value = 10% or 0.10
Calculate the deadweight loss -
= Average amount spent on gifts * Percentage loss in value
DWL = $906 * 0.10
The deadweight loss would be $90.6.
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A study by university of minnesota economist, joel waldfogel, estimated the difference in the actual monetary value of gifts received and how much the recipients would have been willing to pay to buy them on their own. the study suggested that the average recipient’s valuation was approximately 90% of the actual purchase price.
Calculate the deadweight loss if the average amount is $906.
