You will take on the role of the benevolent socialplanner. Remember the sole objective of a benevolent social planneris to maximize total surplus. Below are two lists of numbers. Thetop list represents the opportunity costs of a number of firms thatsupply an unspecified commodity. The bottom list includes thewillingness to pay of a number of buyers who desire to purchasethis unspecified commodity. Using these lists answer the followingquestions.

Sellers and their Opportunity Costs:

Trampled by Turtles 7

Dispatch 8

Valerie June 7

Daft Punk 2

JoshRitter 3

Delfonics 5

Yola 2

Los Lobos 5

Che Apalache 4

Buyers and their Willingness to Pay:

Dolly 4

Loretta 8

Crystal 10

Ernest 5

Dwight 7

Rosanne 10

Ronnie 7

Clint 5

Tracy 9

1. How many exchanges should occur? (1point)

2. What is the total surplus of each exchange thatoccurs? Give the seller’s letter, the buyer’s letter, and the totalsurplus of this pair’s exchange. (1 point)

3. What is total surplus for the entire market? (1point)

4. Assume that a price ceiling is imposed upon thismarket. No unit will be permitted to trade for a price above$4.50.

         a. Whatis quantity supplied at this price? (1 point)

         b. Whatis quantity demanded at this price? (1 point)

         c. Howmany exchanges occur? (1 point)

5. Assume that the government has decided to impose a $3tax per unit, to be paid by the sellers. A seller who does not sella unit pays no tax. Therefore, the tax is like a cost increase of$3. A seller’s cost will really be $3 above the listed opportunitycost.

         a. Howmany exchanges will occur? (1 point)

         b. Whatis the total surplus of each exchange that occurs? Give theseller’s number, the buyer’s number, and the total surplus of thispair’s exchange. (1 point)

         c. Whatis total surplus for the entire market? (1 point)

         d. Isthere any deadweight loss? If so, what is it? (1point)