Question

Fei, morgan, and lakesha are all in the market for new levi’s jeans. The marginal benefit for each pair of jeans for each of them is provided in the accompanying table.

Answer 1

a. If the price of a pair of Levi’s jeans costs $32, Fei will purchase 2.66 pairs of jeans ($85/$32), Morgan will purchase 1.25 pairs of jeans ($40/$32), and Lakesha will purchase 2.81 pairs of jeans ($90/$32).

b. The consumer surplus from the last pair of jeans purchased is i) largest for Lakesha.

c. The total consumer surplus that each of them receives at a price of $32 is as follows:

i) Fei’s total consumer surplus is $53 ($85 - $32).

ii) Morgan’s total consumer surplus is $8 ($40 - $32).

iii) Lakesha’s total consumer surplus is $58 ($90 - $32).

d. The collective consumer surplus that they receive is $119 ($53 + $8 + $58).

What is the marginal benefit?

The marginal benefit is the maximum amount Fei, Morgan, Lakesha are willing to pay for an additional good (a pair of jeans) or service.

The marginal benefit can also be defined as the additional satisfaction or utility that Fei, Morgan, Lakesha receive when they purchase an additional pair of jeans.

What is consumer surplus?

Consumer surplus refers to the difference between the price that Fei, Morgan, and Lakesha pay for a pair of jeans and the price they would be willing to pay instead of not buying the pair.

Complete Question:

Welfare and Efficiency — Fei, Morgan, and Lakesha are all in the market for new Levi’s jeans. The marginal benefit for each pair of jeans for each of them is provided in the accompanying table.

Quantity     Fei        Morgan      Lakesha

1                  $85          $40            $90

2                 $60          $32            $75

3                 $32          $24            $55

4                 $20          $16             $32

5                 $15            $8             $25

a. If the price of a pair of Levi’s jeans costs $32, Fei will purchase ----, Morgan will purchase -----, and Lakesha will purchase -----.

b. The consumer surplus from the last pair of jeans purchased is

i) largest for Lakesha.

ii) largest for Fei.

iii) the same for Fei, Morgan, and Lakesha.

iv) largest for Morgan.

c. How much total consumer surplus will each of them receive at a price of $32?

i) Fei’s total consumer surplus is $

ii) Morgan’s total consumer surplus is $

iii) Lakesha’s total consumer surplus is $

d. How much consumer surplus do they receive collectively?

Collective consumer surplus is $

Thus, the consumer surplus can be computed as the difference between the marginal benefit from each pair of jeans and the cost of a pair.

Learn more about consumer surplus and marginal benefits at brainly.com/question/5012315 and brainly.com/question/8136407