Question

Please help me answer 5-7. I really have been struggling and I need to do well for my grade.

Name: 5. Which of the followin a) It is partly b) It is partly det C) It is partly del d) It can only be the following is FALSE about consumer surplus? Partly determined by the maximum price people will pay for an item Partly determined by the price buyers must pay for the item partly determined by the amount of quantity supplied n only be positive since no one will purchase an item if the price is above their WIP is the area below the demand curve and above the price buyers pay ) It is the area below th Short Answer: Please answer the er: Please answer the questions as best you can. You will be graded primarily on the quanty answer rather than the amount you write. In terms of quality, the most important is to use the concepts and knowledge presented in lecture. Be sure to label the graphs. 6. (8 Points) Think about the market for parking spaces in downtown LA. There is little flexibility in terms of changing the number of parking spaces provided. On the other hand, there are many substitutes for parking in the city such as taking the train or parking lust outside the city and taking a bus. a. Please draw the market for parking spaces in downtown LA. b. If a tax is applied on parking spaces, what happens to the quantity? c. Who pays most of the tax burden? 7. (5 Points) Suppose the California legislature passed a sweeping law to lower the number of regulations for building homes such as increasing the parking requirements and setback requirements. Suppose there is a housing tax. a. What is the effect of this law on the PES for housing? b. What effect would this law have on the tax burden for buyers?

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering one question.

5.

Ans: (c).

Explanation: Since consumer surplus is the sum of (willingness - price) for each consumer, quantity supplied has no role to play in its calculation. All other options are valid.

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