Homework Answers
5) FALSE : It depends on elasticity of supply and elasticity of demand . How much price will a producer receive after a tax incidence , totally depends on elasticity of the two curves . As for example if demand is highly inelastic and supply is elastic in nature then consumer takes maximum tax burden and producer has to take less burden .
6) A subsidy per unit causes and outward shift of market supply curve causing a fall in price . There is both benefit to producers and suppliers . So option c is correct .
The difference between producer receives and consumer pay is subsidy . Option b is incorrect .
Producer received price will be larger than what consumer pays due to subsidy . Option a is correct .
Answer : b
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5. True or False....
Say whether the statement is True or False. If False, supply a reason or correct the...
Say whether the statement is True or False. If False, supply a reason or correct the statement. (a) Producer Surplus is the profit that producers get. (b) Consumer Surplus represents savings. (c) When price is at equilibrium, producer and consumer surplus are equal (d) Deadweight Loss represents goods that cannot be bought or sold due to deviations of price from equilibrium (e) Deviations have a tendency to go back to equilibrium because the government makes price interventions
The following equations represent the inverse supply and demand functions in the market for Good A:...
The following equations represent the inverse supply and demand functions in the market for Good A: PC =80-1⁄2QD PP =14+QS where PC and PP are the prices paid by consumers and received by producers respectively. QD and QS are the quantities demanded and supplied, respectively. Suppose the government is considering imposing a tax of $6 per unit of Good A. a) Compute the competitive market equilibrium price and output without the tax. b) Compute producer surplus and consumer surplus without...
wanna check final answer I already did it Taxation Suppose now the government decides to intervene the market with...
wanna check final answer I already did it
Taxation Suppose now the government decides to intervene the market with a tax on producers of $4, determine the price for the consumer, the g. price for the producer, and the quantity produced with the tax Draw a graph (Diagram 4) representing the market for Hallowcen costurmes with a tax on producers of $4. Accurately label and show the h. area for consumers (CS), producer surplus (PS), deadweight loss (DWL), and government...
2. (Total: 15 pts) The following equations represent the inverse supply and demand functions in the market for Good A:...
2. (Total: 15 pts) The following equations represent the inverse supply and demand functions in the market for Good A: PC = 80 - ½ QD PP = 14 + QS where PC and PP are the prices paid by consumers and received by producers respectively. QD and QS are the quantities demanded and supplied, respectively. Suppose the government is considering imposing a tax of $6 per unit of Good A. a) (2pts) Compute the competitive market equilibrium price and...
Drag the words into the correct boxes. drag the Drag the words into the correct boxes...
Drag the words into the correct boxes.
drag the
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in...
please give all the answers. dont need explanations too much 14. If a market is in...
please give all the answers. dont need explanations too much
14. If a market is in equilibrium, then we know that price equals marginal cost because a. the market demand curve reflects marginal cost. b. marginal cost never changes. c. the market supply curve reflects marginal cost. d. every firm has the same costs. e. firms are required by law to equate marginal cost to price. 15. A positive externality raises a. marginal social benefits above marginal private benefits. b....
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in...
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in a market represented by the following equations: QD = 15 - 10P QS = 40P - 50 where Q is millions of bottles per year and P measures dollars per bottle. The equilibrium price of bubbly water is $1.30 per bottle and 2 million bottles are sold each year. (a) Calculate the price elasticity of demand and the price elasticity of supply at the...
at a Drag the words into the correct boxes Market occurs when all Net have been...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
This chapter analyzed the welfare effects of a tax on a good. Consider now the opposite...
This chapter analyzed the welfare effects of a tax on a good. Consider now the opposite policy. Suppose that the government subsidizes a good. For each unit of the good sold, the government pays $2 to the buyer. Use the black point (plus symbol) to indicate the initial equilibrium in this market before the subsidy. Then use the green point (triangle symbol) to shade the area representing consumer surplus, and use the purple point (diamond symbol) to shade the area representing...
Drag the words into the correct boxes Market occurs when all Net have been captured. This...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
wanna check final answer I already did it
Taxation Suppose now the government decides to intervene the market with a tax on producers of $4, determine the price for the consumer, the g. price for the producer, and the quantity produced with the tax Draw a graph (Diagram 4) representing the market for Hallowcen costurmes with a tax on producers of $4. Accurately label and show the h. area for consumers (CS), producer surplus (PS), deadweight loss (DWL), and government...
Drag the words into the correct boxes.
drag the
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in...
please give all the answers. dont need explanations too much
14. If a market is in equilibrium, then we know that price equals marginal cost because a. the market demand curve reflects marginal cost. b. marginal cost never changes. c. the market supply curve reflects marginal cost. d. every firm has the same costs. e. firms are required by law to equate marginal cost to price. 15. A positive externality raises a. marginal social benefits above marginal private benefits. b....
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in a market represented by the following equations: QD = 15 - 10P QS = 40P - 50 where Q is millions of bottles per year and P measures dollars per bottle. The equilibrium price of bubbly water is $1.30 per bottle and 2 million bottles are sold each year. (a) Calculate the price elasticity of demand and the price elasticity of supply at the...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
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