Homework Answers
21) With no regulation external cost is not realized and so market price will be $5 and a total of 50 units are consumed. Select 50
22) For 20 units, Pbuyer = 6.5 and Pseller is 2. For 19 units Pbuyer is 6.55 and Pseller is 1.9 units. Hence total surplus of 20th unit = TS of 20 units - TS of 19th unit
= 0.5*(7.5 + 6.5 - 2)*20 - 0.5*(7.5 + 6.55 - 1.9)*19
= 4.575
Select OPTION D.
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Price (s) 10 50 Quantity Figure 6 21. Refer to Figure 6. Suppose that the consumption...
Price (S) 50 Quantity Figure 3 12. Refer to Figure 3. Assume that production of this good generates a $30 per unit exte...
Price (S) 50 Quantity Figure 3 12. Refer to Figure 3. Assume that production of this good generates a $30 per unit external cost. How many of the following regulations would lead to the efficient outcome? • A price ceiling at $30 • A price floor at $60 • A per-unit tax of $30 • A per-unit subsidy of $30 a) 1 b) 2 c) 3 d) 4 13. Refer to Figure 3. Assume that production of this good generates...
14. Refer to Figure 3. Assume that production of this good generates a $30 per unit external cost. How much total surpl...
14. Refer to Figure 3. Assume that production of this good
generates a $30 per unit external cost. How much total surplus is
generated in this market at the efficient outcome?
a) $375
b) $675
c) $1,250
d) $2,175
Price (S) 50 50 Quantity Figure 3
Price ($) 100T Social Cost ! Private Cost 50 Quantity Figure 7 23. Refer to Figure 7, which shows a market in which the...
Price ($) 100T Social Cost ! Private Cost 50 Quantity Figure 7 23. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which area(s) represent(s) the deadweight loss associated with the competitive market outcome? a) A b) B c) C d) B+C 24. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which of the following policies would...
Price of almonds P (dollars per ton) Price floor Quantity of almonds (tons) Figure 4-6 shows...
Price of almonds P (dollars per ton) Price floor Quantity of almonds (tons) Figure 4-6 shows the demand and supply curves for the almond market. The government believes that the equilibrium pr is too low and tries to help almond growers by setting a price floor at PT 5) 5) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor? А) в B) B+E...
Price (S) 100T 500 Quantity Figure 4 15. Refer to Figure 4. Suppose there is a...
Price (S) 100T 500 Quantity Figure 4 15. Refer to Figure 4. Suppose there is a $30 external benefit associated with the production of this good. What is the most that 3rd parties would be willing to pay to have either side of the market internalize the external benefit (i.e, move from the competitive market outcome to the efficient outcome)? a) $0 b) $6,000 c) $15,000 d) $21,000
suppose that Figure 6-3 Panel (a) Panel (b) lo IP 10 IM Price Floor Price Ceiling...
suppose that
Figure 6-3 Panel (a) Panel (b) lo IP 10 IM Price Floor Price Ceiling 2 4 6 8 10 12 14 16 Quantity -+ 4 + 6 + 8 + + + 10 12 14 16 Duality 3. Refer to Figure 6-3. A binding price floor is shown in a. both panel (a) and panel (b). b. panel (a) only. c. panel (b) only. d. neither panel (a) nor panel (b). ght Congage Leaming. Powered by Cognero. >...
Refer to Figure 6.4. Suppose that the current price is set at B and Q2 units...
Refer to Figure 6.4. Suppose that the current price is set at B and Q2 units of a good are traded. Which of the following statements is incorrect? Price Supply curve A O A. Total surplus would decrease should the price fall. O B. Total surplus would increase should the price rise. O C. The quantity demanded equals the quantity supplied. O D. The current market transaction is efficient Demand curve Quantity Figure 6.4
Price Refer to Figure 6.4. Suppose that the current price is set at B and Q, units of a good are traded. Which of the f...
Price Refer to Figure 6.4. Suppose that the current price is set at B and Q, units of a good are traded. Which of the following statements is incorrect? Supply curve O A. Total surplus would decrease should the price fall. OB. The quantity demanded equals the quantity supplied. OC. The current market transaction is efficient. O D. Total surplus would increase should the price rise. Demand curve & Q3 Quantity Figure 6.4
Price $5.00 - 2.00 25 45 60 75 Quantity Refer to Figure 6-7. If the government...
Price $5.00 - 2.00 25 45 60 75 Quantity Refer to Figure 6-7. If the government imposes a binding price floor of $5.00 in this market, what is the result? a surplus of 15 units a surplus of 20 units a surplus of 35 units a shortage of 20 units Figure 8-5 Price Quantity Refer to Figure 8-5. Assume the tax was levied on the consumer. Which area represents the reduction in producer surplus? ОА Ов+с OD+E+F ODE
Figure 6-13 PRICE Demand 160 80 105 120 QUANTITY Refer to Figure 6-13. What is the...
Figure 6-13 PRICE Demand 160 80 105 120 QUANTITY Refer to Figure 6-13. What is the amount of the tax per unit? ОООО Which of the following is not correct? 10 a. A minimum wage would not be binding if the equilibrium wage was above the minimum wage. O b. A minimum wage would be binding for workers with high skills and much experience. HOC. The impact of a minimum wage depends on the skill and experience of the worker....
Price (S) 50 Quantity Figure 3 12. Refer to Figure 3. Assume that production of this good generates a $30 per unit external cost. How many of the following regulations would lead to the efficient outcome? • A price ceiling at $30 • A price floor at $60 • A per-unit tax of $30 • A per-unit subsidy of $30 a) 1 b) 2 c) 3 d) 4 13. Refer to Figure 3. Assume that production of this good generates...
14. Refer to Figure 3. Assume that production of this good
generates a $30 per unit external cost. How much total surplus is
generated in this market at the efficient outcome?
a) $375
b) $675
c) $1,250
d) $2,175
Price (S) 50 50 Quantity Figure 3
Price ($) 100T Social Cost ! Private Cost 50 Quantity Figure 7 23. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which area(s) represent(s) the deadweight loss associated with the competitive market outcome? a) A b) B c) C d) B+C 24. Refer to Figure 7, which shows a market in which the production of the good generates a $45 external cost. Which of the following policies would...
Price of almonds P (dollars per ton) Price floor Quantity of almonds (tons) Figure 4-6 shows the demand and supply curves for the almond market. The government believes that the equilibrium pr is too low and tries to help almond growers by setting a price floor at PT 5) 5) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor? А) в B) B+E...
Price (S) 100T 500 Quantity Figure 4 15. Refer to Figure 4. Suppose there is a $30 external benefit associated with the production of this good. What is the most that 3rd parties would be willing to pay to have either side of the market internalize the external benefit (i.e, move from the competitive market outcome to the efficient outcome)? a) $0 b) $6,000 c) $15,000 d) $21,000
suppose that
Figure 6-3 Panel (a) Panel (b) lo IP 10 IM Price Floor Price Ceiling 2 4 6 8 10 12 14 16 Quantity -+ 4 + 6 + 8 + + + 10 12 14 16 Duality 3. Refer to Figure 6-3. A binding price floor is shown in a. both panel (a) and panel (b). b. panel (a) only. c. panel (b) only. d. neither panel (a) nor panel (b). ght Congage Leaming. Powered by Cognero. >...
Refer to Figure 6.4. Suppose that the current price is set at B and Q2 units of a good are traded. Which of the following statements is incorrect? Price Supply curve A O A. Total surplus would decrease should the price fall. O B. Total surplus would increase should the price rise. O C. The quantity demanded equals the quantity supplied. O D. The current market transaction is efficient Demand curve Quantity Figure 6.4
Price Refer to Figure 6.4. Suppose that the current price is set at B and Q, units of a good are traded. Which of the following statements is incorrect? Supply curve O A. Total surplus would decrease should the price fall. OB. The quantity demanded equals the quantity supplied. OC. The current market transaction is efficient. O D. Total surplus would increase should the price rise. Demand curve & Q3 Quantity Figure 6.4
Price $5.00 - 2.00 25 45 60 75 Quantity Refer to Figure 6-7. If the government imposes a binding price floor of $5.00 in this market, what is the result? a surplus of 15 units a surplus of 20 units a surplus of 35 units a shortage of 20 units Figure 8-5 Price Quantity Refer to Figure 8-5. Assume the tax was levied on the consumer. Which area represents the reduction in producer surplus? ОА Ов+с OD+E+F ODE
Figure 6-13 PRICE Demand 160 80 105 120 QUANTITY Refer to Figure 6-13. What is the amount of the tax per unit? ОООО Which of the following is not correct? 10 a. A minimum wage would not be binding if the equilibrium wage was above the minimum wage. O b. A minimum wage would be binding for workers with high skills and much experience. HOC. The impact of a minimum wage depends on the skill and experience of the worker....
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