Principles of Macroeconomics
6th Edition
ISBN: 9780073518992
Author: Robert H. Frank, Ben Bernanke Professor, Kate Antonovics, Ori Heffetz
Publisher: McGraw-Hill Education
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Chapter 1, Problem 1P
To determine
Estimate the value of economic surplus
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From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on non customers, who make $14 million in withdrawals from other banks' ATM machines. On average, non customers earn a wage of $24 per hour and pay ATM fees of $3.00 per transaction. It is estimated that banks would be willing to maintain services for 6 million transactions at $1.00 per transaction, while non customers would attempt to conduct 22 million transactions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical customer will have to spend an extra minute traveling to another machine to withdraw cash. What would be the nonpecuniary cost of legislation that would place a $1.00 cap on the fees banks can charge for non customer transactions? Economic price?
From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $10 million in withdrawals from other banks’ ATM machines. On average, noncustomers earn a wage of $22 per hour and pay ATM fees of $3.00 per transaction. It is estimated that banks would be willing to maintain services for 6 million transactions at $1.25 per transaction, while noncustomers would attempt to conduct 21 million transactions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute traveling to another machine to withdraw cash.Based on this information, what would be the nonpecuniary cost of legislation that would place a $1.25 cap on the fees banks can charge for noncustomer transactions?Instructions: Enter your responses rounded to the nearest penny (two decimal places).$ What would be the full…
From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that
banks impose on noncustomers, who make $12 million in withdrawals from other banks' ATM machines. On average, noncustomers
earn a wage of $22 per hour and pay ATM fees of $3.75 per transaction. It is estimated that banks would be willing to maintain
services for 5 million transactions at $1.25 per transaction, while noncustomers would attempt to conduct 21 million transactions at that
price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to
spend an extra minute traveling to another machine to withdraw cash.
Based on this information, what would be the nonpecuniary cost of legislation that would place a $1.25 cap on the fees banks can
charge for noncustomer transactions?
Instructions: Enter your responses rounded to the nearest penny (two decimal places).
%24
1.83
What would be…
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Principles of Macroeconomics
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