Homework Answers
Ans. c. new buyers enter the market, increasing consumer surplus.
When the price of the good decreases, new buyers will enter the market and old buyers will now pay a lower price for the good that leads to an increase in consumer surplus.
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As a result of a decrease in price, a new buyers enter the market, decreasing consumer...
Why the consumer surplus may increase or remain unchanged? 27. Suppose televisions are a normal good and buyers of t...
Why the consumer surplus may increase or remain
unchanged?
27. Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market a. decreases. b. is unchanged. c. increases. d. may increase, decrease, or remain unchanged.
32. Which of the following quantities decrease in response to a tax on a good? a. the size of the market for the go...
32. Which of the following quantities decrease in response to a tax on a good? a. the size of the market for the good, the effective price of the good paid by buyers, and consumer surplus b. the size of the market for the good, producer surplus, and the well-being of buyers of the good (consumer surplus) c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price...
Based on your analysis, as a result of the tariff, new Zealand's consumer surplus (increase/decrease) by...
Based on your analysis, as a result of the tariff, new Zealand's
consumer surplus (increase/decrease) by
$______________, a producer surplus
*(increase/Decrease) by
$__________, and the government collects
$____________ in revenue. Therefore, the net
welfare effect is a (gain/loss) by
$____________.
3. Welfare effects of a tariff in a small country Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand's small size, the demand for and supply of wheat in New Zealand...
do part b Figure 1: Market for Musthaves Price $40 Supply 24 1X1 Demand 32 48...
do part b
Figure 1: Market for Musthaves Price $40 Supply 24 1X1 Demand 32 48 72 Quantity Question 1: Use Figure 1 (The Market for Musthaves) to answer the following: b) Suppose that an event causes Musthaves to become a necessary item for most people. As a result, the number of buyers of Musthaves increases significantly and the equilibrium price rises to $28. i. Show graphically why this happens. ii. What is the new consumer surplus? How does it...
If the government imposes a maximum price in a market that is below the equilibrium price:...
If the government imposes a maximum price in a market that is below the equilibrium price: O A. total surplus in the market does not change. O B. total surplus in the market increases. O C. total surplus may increase or decrease, depending on whether costs are increasing or decreasing in production. O D. total surplus in the market decreases
1. Consumer Surplus Question (10 points) The buyers side of the market for laser tag tickets...
1. Consumer Surplus Question (10 points) The buyers side of the market for laser tag tickets consists of two types of consumers who demand curves are shown below. 18 12 Price ($/ticket) Price ($/ticket) 24 48 Tickets/yr Tickets/yr a. Graph the market demand curve on the graph below. Label everything (use units of 4 for the x-axis so it fits). Hint: It is helpful to determine the equations of the lines using y=mx+b for each so you can plug in...
The consumer market for hamburgers when there is a decrease in the price of hotdogs (assuming...
The consumer market for hamburgers when there is a decrease in the price of hotdogs (assuming hamburgers and hotdogs are substitutes) A. Increase in Demand for hamburgers B. Decrease in Demand for hamburgers C. Increase in Quantity Demanded for hamburgers D. Decrease in Quantity Demanded for hamburgers
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a...
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a tax saus fall, increasing both consumer surplus and producer Surplus fall, decreasing both consumer surplus and producer surplus rise, increasing both consumer surplus and producer surplus rise, decreasing both consumer surplus and producer surplus Use the graph below to answer questions 6 through 10. Price 8.50 Supply + Tas 6.50 5.50 4.50 - Supply 3.50 Demand 750 1,500 Quantity If there is no tax...
Figure 9 Price F D B PI G c - P2 Demand Quantity Q1 02 Refer...
Figure 9 Price F D B PI G c - P2 Demand Quantity Q1 02 Refer to Figure 9. Which area represents consumer surplus at a price of P1? a. BDF b. AFG C. ABDG d. ABC Refer to Figure 9. Which area represents consumer surplus at a price of P2? a. BDF b. AFG C. ABDG d. ABC Refer to Figure 9. Which area represents the increase in consumer surplus when the price falls from P1 to P2? a....
Microeconomics Questions Price of Sandalwood Domestic Supply $800 $600 Domestic Demand Q, Q, Q Quantity of Sandalw...
Microeconomics Questions
Price of Sandalwood Domestic Supply $800 $600 Domestic Demand Q, Q, Q Quantity of Sandalwood The graph above shows the domestic market for sandalwood in equilibrium at a price of $800 per kilogram in the absence of international trade. Now assume the country begins to engage in international trade, and sandalwood is selling at a price of $600 per kilogram in the world market. Which of the following would most likely result? a) The country would increase domestic...
Why the consumer surplus may increase or remain
unchanged?
27. Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market a. decreases. b. is unchanged. c. increases. d. may increase, decrease, or remain unchanged.
32. Which of the following quantities decrease in response to a tax on a good? a. the size of the market for the good, the effective price of the good paid by buyers, and consumer surplus b. the size of the market for the good, producer surplus, and the well-being of buyers of the good (consumer surplus) c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price...
Based on your analysis, as a result of the tariff, new Zealand's
consumer surplus (increase/decrease) by
$______________, a producer surplus
*(increase/Decrease) by
$__________, and the government collects
$____________ in revenue. Therefore, the net
welfare effect is a (gain/loss) by
$____________.
3. Welfare effects of a tariff in a small country Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand's small size, the demand for and supply of wheat in New Zealand...
do part b
Figure 1: Market for Musthaves Price $40 Supply 24 1X1 Demand 32 48 72 Quantity Question 1: Use Figure 1 (The Market for Musthaves) to answer the following: b) Suppose that an event causes Musthaves to become a necessary item for most people. As a result, the number of buyers of Musthaves increases significantly and the equilibrium price rises to $28. i. Show graphically why this happens. ii. What is the new consumer surplus? How does it...
If the government imposes a maximum price in a market that is below the equilibrium price: O A. total surplus in the market does not change. O B. total surplus in the market increases. O C. total surplus may increase or decrease, depending on whether costs are increasing or decreasing in production. O D. total surplus in the market decreases
1. Consumer Surplus Question (10 points) The buyers side of the market for laser tag tickets consists of two types of consumers who demand curves are shown below. 18 12 Price ($/ticket) Price ($/ticket) 24 48 Tickets/yr Tickets/yr a. Graph the market demand curve on the graph below. Label everything (use units of 4 for the x-axis so it fits). Hint: It is helpful to determine the equations of the lines using y=mx+b for each so you can plug in...
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a tax saus fall, increasing both consumer surplus and producer Surplus fall, decreasing both consumer surplus and producer surplus rise, increasing both consumer surplus and producer surplus rise, decreasing both consumer surplus and producer surplus Use the graph below to answer questions 6 through 10. Price 8.50 Supply + Tas 6.50 5.50 4.50 - Supply 3.50 Demand 750 1,500 Quantity If there is no tax...
Figure 9 Price F D B PI G c - P2 Demand Quantity Q1 02 Refer to Figure 9. Which area represents consumer surplus at a price of P1? a. BDF b. AFG C. ABDG d. ABC Refer to Figure 9. Which area represents consumer surplus at a price of P2? a. BDF b. AFG C. ABDG d. ABC Refer to Figure 9. Which area represents the increase in consumer surplus when the price falls from P1 to P2? a....
Microeconomics Questions
Price of Sandalwood Domestic Supply $800 $600 Domestic Demand Q, Q, Q Quantity of Sandalwood The graph above shows the domestic market for sandalwood in equilibrium at a price of $800 per kilogram in the absence of international trade. Now assume the country begins to engage in international trade, and sandalwood is selling at a price of $600 per kilogram in the world market. Which of the following would most likely result? a) The country would increase domestic...
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