The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the quantity of milk sold is
A) less than the efficient level of output.
B) greater than the efficient level of output.
C) 100 million gallons greater than the efficient level of output.
D) the efficient level of output.
Homework Answers
A subsidy paid to the producers of $1 gallon of milk produced will shift the supply curve to the right (because of fall in production cost) as a result the quantity of milk sold will increase from 300 million gallons.
300 gallons of milk sold is the equilibrium quantity when there was no subsidy to producers.
After subsidy, the equilibrium quantity of milk will be more than 300 million gallons.
hence currently, the quantity of milk sold is less than the efficient level of output.
Answer: Option (B)
When a subsidy is paid to producers the supply increases as producer's cost of production falls after subsidy . The shift in supply curve is equivalent to subsidy given which raises quantity by 100 million . So equilibrium price falls and quantity rises . Answer : C) 100 million gallons greater than the efficient level of output .
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The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced.
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The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the quantity of milk sold is Select one: O a. greater than the efficient level of output. O b. less than the efficient level of output. Oc. 100 million gallons greater than the efficient level of output. O d. the efficient level of output.
The fiqure shows the market for mik in Cowland that suppliers keep per gallon? a subsidy...
The fiqure shows the market for mik in Cowland that suppliers keep per gallon? a subsidy paid to producers of $1 per galon of mik intreduced wat is the amount, including the subsidy O A. S4.00 a gallon OB. between 53.00 and $4.00 per galon O C. $3.00 a gallon O D. between $4.00 and S5.00 per gallon 4 3 00 200 300 00 500 aco G y n of galon per yal d sel
Need help with this problem b-e, i did a already. Need help asap. Thanks Consider an agricultural subsidy provided by th...
Need help with this problem
b-e, i did a already. Need help asap. Thanks
Consider an agricultural subsidy provided by the US government. Consider also that milk is one of the products subsidized. If there is NO trade with the rest of the world, the domestic price of milk in the US would be $2.25 per gallon and the equilibrium quantity would be 100 gallons at this price. After trade opens, at the world market price of $1.50 per gallon,...
Question 1 Suppose the government introduces a subsidy of $5 (paid to producers) per unit into...
Question 1 Suppose the government introduces a subsidy of $5 (paid to producers) per unit into a market. a) If the government's goal is to help producers, will the subsidy be more or less effective in the short run when the demand curve is relatively elastic? (explain) (6%) b) What is the effect of the subsidy on the equilibrium price, quantity, consumer surplus, and producer surplus in the long run in a constant cost industry? (6%) c) How does the...
Assume that the market demand and supply curves for milk are as shown in the graph...
Assume that the market demand and supply curves for milk are as
shown
in the graph below.
As shown in the graph, the market clearing price is $3 per
gallon and the quantity
exchanged is 100 gallons per hour. Now assume that the
government imposes a tax of
2$ per gallon of milk produced.
a.
What is the total tax revenue the government will collect? Also,
shade
the area on your graph where the total tax revenue is
represented.
b....
30) The figure above shows that the government provides a subsidy to the farmers of ________...
30) The figure above shows that
the government provides a subsidy to the farmers of ________
million.
A) $350
B) $1,050
C) $50
D) $100
E) $700
Price (dollars per ton) 70+ S 60 50+ 40 Support price 35 25 10+ D 0 10 20 25 30 40 50 Quantity (millions of tons per year)
The following graph shows the market for milk. Suppose the government introduces a variety of policies...
The following graph shows the market for milk. Suppose the government introduces a variety of policies that set floor prices for milk at $3. At the support price, a surplus of gallons is generated Figure 16.1 Dollars per gallon S b 33 Support price 2 1 1 1 1 0 75 100 150 Gallons of milk Select one: a. 25 b. 75 C. 100 d. 1.50
57. The following figure shows the market supply and demand of a good whose production entails...
57. The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit. Refer to the figure above. A total of ________ units of this good will be traded in this market, at the price of ________. a. 20; $2 b. 60; $8 c. 40; $4 d. 80; $6 58. The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit....
The figure shows the market for cotton in Georgestan. The government regulates the market with a...
The figure shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. With the quota in place, the amount of cotton produced in Georgestan is _ __because the marginal social cost of a pound of cotton is _ __ the marginal social benefit of a pound of cotton. Price (cents per pound) O A. inefficient; greater than O B. efficient; equal to O C. inefficient; less than...
1. Refer to Figure 1-5. The figure above represents demand and supply in the market for...
1. Refer to Figure 1-5. The figure above represents demand and
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The fiqure shows the market for mik in Cowland that suppliers keep per gallon? a subsidy paid to producers of $1 per galon of mik intreduced wat is the amount, including the subsidy O A. S4.00 a gallon OB. between 53.00 and $4.00 per galon O C. $3.00 a gallon O D. between $4.00 and S5.00 per gallon 4 3 00 200 300 00 500 aco G y n of galon per yal d sel
Need help with this problem
b-e, i did a already. Need help asap. Thanks
Consider an agricultural subsidy provided by the US government. Consider also that milk is one of the products subsidized. If there is NO trade with the rest of the world, the domestic price of milk in the US would be $2.25 per gallon and the equilibrium quantity would be 100 gallons at this price. After trade opens, at the world market price of $1.50 per gallon,...
Question 1 Suppose the government introduces a subsidy of $5 (paid to producers) per unit into a market. a) If the government's goal is to help producers, will the subsidy be more or less effective in the short run when the demand curve is relatively elastic? (explain) (6%) b) What is the effect of the subsidy on the equilibrium price, quantity, consumer surplus, and producer surplus in the long run in a constant cost industry? (6%) c) How does the...
Assume that the market demand and supply curves for milk are as
shown
in the graph below.
As shown in the graph, the market clearing price is $3 per
gallon and the quantity
exchanged is 100 gallons per hour. Now assume that the
government imposes a tax of
2$ per gallon of milk produced.
a.
What is the total tax revenue the government will collect? Also,
shade
the area on your graph where the total tax revenue is
represented.
b....
30) The figure above shows that
the government provides a subsidy to the farmers of ________
million.
A) $350
B) $1,050
C) $50
D) $100
E) $700
Price (dollars per ton) 70+ S 60 50+ 40 Support price 35 25 10+ D 0 10 20 25 30 40 50 Quantity (millions of tons per year)
The following graph shows the market for milk. Suppose the government introduces a variety of policies that set floor prices for milk at $3. At the support price, a surplus of gallons is generated Figure 16.1 Dollars per gallon S b 33 Support price 2 1 1 1 1 0 75 100 150 Gallons of milk Select one: a. 25 b. 75 C. 100 d. 1.50
The figure shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. With the quota in place, the amount of cotton produced in Georgestan is _ __because the marginal social cost of a pound of cotton is _ __ the marginal social benefit of a pound of cotton. Price (cents per pound) O A. inefficient; greater than O B. efficient; equal to O C. inefficient; less than...
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following questions.
a. How much is the government tax on each pack of
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b. What portion of the unit tax is paid by consumers?
c. What portion of the unit tax is paid by producers?
d. What is the quantity sold after the imposition of the
tax?
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