.. Given the demand and supply system: Pb = 60 - 5.25 Qb & Pb = 13 + 6 Qv. How much total surplus s created by producing 2 more units than the equilibrium Q*?
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- Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?i.If the market conditions for a given good are specified by Qd=60,000-500P and Qs=500P, If government decides to set the price at 40 current units, what policy is this? What are the implications of this action? ii.If the government imposes a tax of Gh¢20 on the good above, establish the new equilibrium price and quantity and deduce the burden of tax on consumer and producer and identify the nature of commodity in questionThe annual demand and supply for liquor in a certain state is given by the following equation: Qd= 500,000 − 20,000P Qs=30,000P where P is the price per gallon and QD is quantity of gallons demanded per year. a. Suppose that a $1-per-gallon tax is levied on the price of liquor received by sellers. Use both graphic and algebraic techniques to show the impact of the tax on market equilibrium. b. Calculate (i) the excess burden of the tax, (ii) the amount of revenues collected, and (iii) the incidence of the tax between buyers and sellers.
- The market demand and supply functions for potatoes are: QD = 2,000 - 500P and QS = 800 + 100P. To help potato producers, the government is considering legislation that would put a price floor at $2.25 per bag. If this price floor is implemented, determine (i) how many bags of potatoes will the government be forced to buy to keep the price at $2.25; (ii) how much government will spend in total; and (iii) how much producer- and consumer -surplus changes.Don't use pen or paper Suppose market demand and supply are characterized by the following equations: p = 12 - 0.4 Qd p = 2 + 0.4 Qs When the market clears, what is the economic surplus? (Round your answer to one decimal place.)a- Start from the initial endowment point Ex A and Ey A for individual A(the commodities in the economy are x and y) and initial endowment point Ex B and Ey B for individual B. Write down the no excess demand condition for both individuals, and write down the collective no excess demand condition for the entire society, if the demands of individual A is XA and YA and the demands of individual B is XB and YB. b-If UA=XA 2/3×YA 1/3 and UB=min(2YB, XB) establish the main equation for the contract curve for the society. Assume that the starting endowment level is Ex A=2 Ex B=4 and Ey A=2 Ey B=1. c-In terms of the MRS`s for the two individuals why is it very hard to guarantee equalization? Graphically represent the situation. d- Compute the competitive equilibrium (prices and quantities) for the exchange economy? e- Does your results in d substantiate the first welfare theorem? Explain why or why not. f- Write down what the second fundamental theorem says about the trade-off between equity…
- 1. Identify the type of market failure here and why dies market failure occurs in this scenario? 2. Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. 3. Carefully explain how the imposition of the chosen government policy impact consumer surplus, producer surplus and total surplus in this scenario.Give typing answer with explanation and conclusion to all parts 1. Suppose that the demand curve for wheat is Q = 200 – 20p and the supply curve is Q = 20p. The government provides producers with a specific subsidy of s = $2 per unit. a. How do the equilibrium price and quantity change? b. What effect does the tax have on consumer surplus, producer surplus, government revenue, and deadweight loss.Exercise 1: Assume that market for good A has two individual buyers with the following demand functions: P1 = 10 – Q1 and P2 = 10 – 0,5Q2 respectively. Market supply function is Q = 2P – 10 (P: 1000$/ton, Q: tons). If Government imposes a price ceiling of 7000$/ton and supplies all the shortage amount then consumer surplus is? A. CS = 11500$B. CS=12500$C. CS=13500$D. None of the above
- In a market, what determines the value of the total surplus? Question 22Answer a. the total value to buyers less the total costs to sellers b. consumers' willingness to pay plus producer costs c. producer surplus plus consumer surplus d. the total costs to sellers less the total value to buyersThe supply and demand curve for product X is given as: Qd=160- 50P; Qs= 30P+16 : a. Price and equilibrium in product market X?\ b. Suppose the government stipulates a price of $2.3/a product. + Calculate surplus or shortage of X (If any) + Calculates the change in the surplus of producers, consumers, and deadweight loss.Consider a free market with demand equal to Q = 1,200 – 10P and supply equal to Q = 20P. A. What is the value of consumer surplus? What is the value of producer surplus? What is the total surplus? B. Now the government imposes a $10 per unit subsidy on the production of the good. What is the consumer surplus now? The producer surplus? Why there is a deadweight loss associated with the subsidy, and what is the size of this loss