Welfare and Efficiency-Endof Chapter ProblemConsider the national market for in-home childcare, depicted in the accompanying graph.a. At 8 million hours, what is the size of the total economic surplus in this market? Place the shape on the graph to label totaleconomic surplus in this market at 8 million hours, and calculate the value of the economic surplus.Rate ($ per hour)2 2 2 2 2 2 2 2 O..302826242220181614121086420024 610128Quantity (millions of hours)Economic surplus at 8 million hours: S14BO16Supply18 20Economic surplu...Deadweight lossDemandmillion. Economic surplus at 8 million hours: $b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to labelthe actual hours, and calculate the new value of the economic surplus in the market at 4 million hours.Economic surplus at 4 million hours: Sc. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours.d. At 4 million hours, the marginal benefit to households ise. The efficient quantity of hours in this market ismillion hours.million.million.the marginal cost to child care providers.

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Economic surplus at 8 million hours: $ b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to label the actual hours, and calculate the new value of the economic surplus in the market at 4 million hours. Economic surplus at 4 million hours: S million. c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours. million.

Economic surplus at 8 million hours: $ b. Now, suppose that the actual quantity of childcare hours in the market is 4 million. Place points A and B on the graph to label the actual hours, and calculate the new value of the economic surplus in the market at 4 million hours. Economic surplus at 4 million hours: S million. c. Place the shape on the graph to label the deadweight loss that occurs in the market at 4 million hours. million.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 4DQ

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