Question

Q6 (1 point). Use the following data to answer the next 6 questions. The figure below shows the market for apartments in downtown Rochester. Suppose a rent ceiling of $600 is imposed. What is the quantity of apartments supplied after the rent ceiling? Numerical answer 40 2100 1800 1500 1200 X 900 600 300 D 0 20 40 60 80 100 120 140 Activate Windows

Q8 (1 point).

What is the change in producer surplus?

PS decreases by 36,000.

PS decreases by 24,000.

PS increases by 36,000.

PS increases by 24,000.

Q9 (1 point).

What is the change in consumer surplus?

CS decreases by 12,000.

CS increases by 12,000.

CS increases by 36,000.

CS decreases by 36,000.

Q10 (1 point).

The deadweight loss from the policy is

12,000.

1 trillion.

36,000.

24,000.

Q11 (1 point).

Suppose instead the rent ceiling is set at $1,500. The deadweight loss from the policy is

24,000.

0

12,000

Q14 (1 point).

Refer to the figure entitled "Market for Meds". If a production quota of 20 units is imposed, what will be the change in consumer surplus?

Consumer surplus will increase by 22.5.

Consumer surplus will decrease by 22.5.

Consumer surplus will increase by 25.

Consumer surplus will decrease by 25.

not sure if my rent cell answer is correct

Answer 1

Answer- 6. 40 is the quantity of apartments supplied after the rent ceiling is imposed.

Answer- 7. 120 is the quantity of apartments demanded after the rent ceiling is imposed.

Answer.8. Correct option is 'b'

Producer surplus is the difference between how much a person would be willing to accept for given quantity of a good versus how much they can receive by selling the good at the market price. The difference or surplus amount is the benefit the producer receives for selling the good in the market.

Producer surplus =   (Market Price - Minimum Price to Sell) * Quantity Sold

                           =    (1200 - 600) * (80 - 40)

                           =    600 * 40

                           =    24000

Producer surplus decreases by 24,000.

Answer.9. Correct option is 'b'

Consumer Surplus = 1/2 (Maximum price willing to pay - Market price) * Quantity

                             = 1/2 (1200 - 600) * (120 - 40)

                             = 1/2 * 600 * 40

                             =   12000

Consumer Surplus increases by 12,000.

Answer.10. Correct option is 'd'

The deadweight loss = 1/2 * (Change in price) * (Change in Quantity)

                                = 1/2 * (1800 - 600) * (80 - 40)

                                = 1/2 * 1200 * 40

                                =   24000

The deadweight loss from the policy is 24000.

Answer-11. Correct option is 'b'

Suppose instead the rent ceiling is set at $1,500. The deadweight loss from the policy is 0. An ineffective price ceiling created when the price ceiling is above the equilibrium price. Since the ceiling price is above the equilibrium price, natural equilibrium still holds, no quantity shortage are created and no deadweight loss is created.