Homework Answers
Problem 16
Supply, q=(1/4)p
Demand=q=6-(1/2)p
In equilibrium, quantity demanded=quantity supplied
6-(1/2)p=(1/4)p
(3/4)p=6
p*=(6*4)/3=$8
Quantity demanded=6-(1/2)*p=6-(1/2)*8=2
Quantity supplied=1/4p=1/4*8=2
Equilibrium quantity=q*=2
Correct option is
A p*=$8 and q*=2
Problem 17
At a price floor of $10
Quantity demanded=6-(1/2)*p=6-(1/2)*10=1
Quantity supplied=1/4p=1/4*10=2.50
Surplus=Estimated quantity supplied-Estimated quantity demanded=2.50-1=1.50
Correct Option is
B 1.5
Problem 19
| P | qs=1/4p | qd=6-(1/2)p |
| 0 | 0 | 6 |
| 1 | 0.25 | 5.5 |
| 2 | 0.5 | 5 |
| 3 | 0.75 | 4.5 |
| 4 | 1 | 4 |
| 5 | 1.25 | 3.5 |
| 6 | 1.5 | 3 |
| 7 | 1.75 | 2.5 |
| 8 | 2 | 2 |
| 9 | 2.25 | 1.5 |
| 10 | 2.5 | 1 |
| 12 | 3 | 0 |
Dead weight loss=Area of triangular area=1/2*(2-1)*(10-4)=$3
Correct Option is
B. $3
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The next 3 questions involve the following supply and demand equations Supply: q(1/4)P Demand: q 6-...
The next 3 questions involve the following supply and demand equations (please use diagrams to explain)...
The next 3 questions involve the following supply and demand equations (please use diagrams to explain) Supply:q= (1/4)p Demand:q= 6−(1/2)p 17.The government enacts a price floor of $10. What is the surplus? (A) 2.5. (B) 1.5. (C) 3.5. (D) None of the above What is the Deadweight Loss under a price floor of $10? (A) $2. (B) $3. (C) $6. (D) None of the above.
Supply: q = (1/4)p Demand: q = 6 − (1/2)p What is the Deadweight Loss under...
Supply: q = (1/4)p Demand: q = 6 − (1/2)p What is the Deadweight Loss under a price floor of $10? (A) $2. (B) $3. (C) $6. (D) None of the above.
1. Use the following supply and demand equations. Supply: p = 4 + 3q. Demand: p=2,132-9....
1. Use the following supply and demand equations. Supply: p = 4 + 3q. Demand: p=2,132-9. Use these equations to respond to the following questions. (a) What is the market equilibrium? (4%) (b) Under the market equilibrium, what is Total Surplus? (4%) (c) Suppose the government enacts a price ceiling of p= 2, 000. What is Producer Surplus, Consumer Surplus, Total Surplus, and Deadweight Loss? (4%) (d) Instead, suppose that the government enacts a price ceiling of p = 1,100....
Use the following supply and demand equations. Supply:p= 4 + 3q. Demand:p= 2,132−q. Use these equations...
Use the following supply and demand equations. Supply:p= 4 + 3q. Demand:p= 2,132−q. Use these equations to respond to the following questions. (a) What is the market equilibrium? (b) Under the market equilibrium, what is Total Surplus? (c) Suppose the government enacts a price ceiling of ̄p= 2,000. What is ProducerSurplus, Consumer Surplus, Total Surplus, and Deadweight Loss? (d) Instead, suppose that the government enacts a price ceiling of ̄p= 1,100. What is Producer Surplus, Consumer Surplus, Total Surplus, and...
Use the following supply and demand equations. Supply:p= 4 + 3q. Demand:p= 2,132−q. Use these equations to respond to th...
Use the following supply and demand equations. Supply:p= 4 + 3q. Demand:p= 2,132−q. Use these equations to respond to the following questions. (a) What is the market equilibrium? (b) Under the market equilibrium, what is Total Surplus? (c) Suppose the government enacts a price ceiling of ̄p= 2,000. What is ProducerSurplus, Consumer Surplus, Total Surplus, and Deadweight Loss? (d) Instead, suppose that the government enacts a price ceiling of ̄p= 1,100. What is Producer Surplus, Consumer Surplus, Total Surplus, and...
A market demand is P = 10 - Q and market supply is P = 2...
A market demand is P = 10 - Q and market supply is P = 2 + Q. If a price floor os $8 is imposed on this market, then the price floor results in a deadweight loss of... a) $0 b) $1 c) $2 d) $4
Consider the following supply and demand equations, in the market for laddus: Supply:p= (1/5)q, Demand:p= 30−q....
Consider the following supply and demand equations, in the market for laddus: Supply:p= (1/5)q, Demand:p= 30−q. The government wants people to enjoy laddus at a reasonable price, and so enacts a price ceiling of ̄p= 1. What is the deadweight loss under this price ceiling?
Figure 4: A Subsidy surPLY SUPPLY 70 we suby 35 DEMAND 10 30 40 Qatity The next 4 questions involve the above diagra...
Figure 4: A Subsidy surPLY SUPPLY 70 we suby 35 DEMAND 10 30 40 Qatity The next 4 questions involve the above diagram, which depicts a subsidy of $10 per unit 15.What is the initial market price and quantity, before the subsidy is enacted? (A) p 40, q = 30 (B) p 40, a 40 (C) p 35, g 40 (D) p 10, g = 20 16.What is the market price and quantity, with the subsidy enacted? (A) p 40,...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate the equilibrium price and quantity b. Calculate the consumer surplus, producer surplus and total surplus at equilibriunm Suppose the government imposes a tax of $2 for each unit bought. Derive the new equilibrium price that consumers pay, the price that firms receive, and quantity c. d. Calculate the deadweight loss of this tax. e. In a diagram, show the equilibrium in part a and...
QUESTION 3 Figure Price Supply P K I P" P B M N Demand Quantity Refer...
QUESTION 3 Figure Price Supply P K I P" P B M N Demand Quantity Refer to Figure. If the government imposes a tax size of P- P" in the above market then the area L+M+Y represents a. consumer surplus after the tax. producer surplus after the tax. Cconsumer surplus before the tax. producer surplus before the tax. QUESTION 4 4 point Figure Supply Dennd Quantity Q1 02 Q3 Q Qs Refer to Figure. If the government impose a tax...
1. Use the following supply and demand equations. Supply: p = 4 + 3q. Demand: p=2,132-9. Use these equations to respond to the following questions. (a) What is the market equilibrium? (4%) (b) Under the market equilibrium, what is Total Surplus? (4%) (c) Suppose the government enacts a price ceiling of p= 2, 000. What is Producer Surplus, Consumer Surplus, Total Surplus, and Deadweight Loss? (4%) (d) Instead, suppose that the government enacts a price ceiling of p = 1,100....
Figure 4: A Subsidy surPLY SUPPLY 70 we suby 35 DEMAND 10 30 40 Qatity The next 4 questions involve the above diagram, which depicts a subsidy of $10 per unit 15.What is the initial market price and quantity, before the subsidy is enacted? (A) p 40, q = 30 (B) p 40, a 40 (C) p 35, g 40 (D) p 10, g = 20 16.What is the market price and quantity, with the subsidy enacted? (A) p 40,...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate the equilibrium price and quantity b. Calculate the consumer surplus, producer surplus and total surplus at equilibriunm Suppose the government imposes a tax of $2 for each unit bought. Derive the new equilibrium price that consumers pay, the price that firms receive, and quantity c. d. Calculate the deadweight loss of this tax. e. In a diagram, show the equilibrium in part a and...
QUESTION 3 Figure Price Supply P K I P" P B M N Demand Quantity Refer to Figure. If the government imposes a tax size of P- P" in the above market then the area L+M+Y represents a. consumer surplus after the tax. producer surplus after the tax. Cconsumer surplus before the tax. producer surplus before the tax. QUESTION 4 4 point Figure Supply Dennd Quantity Q1 02 Q3 Q Qs Refer to Figure. If the government impose a tax...
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