C. Public good d. Comparative advantage e. Non-discrimination (in the GATT/WTO system) 3al 2. Consider a market in equilibrium where P = 100 and Q = 200. %3D Draw a supply and demand diagram of this equilibrium and label the equilibrium price and quantity. Next draw a price floor at P = 120 and show what happens to quantity demanded and quantity supplied in your diagram. a. b. Show and explain what happens to consumer surplus as a result of this price floor (you don't have to make any calculations here). c. Suppose that E = -0.8. Calculate the new quantity demanded at P = 120 and show your work. %3D d. Suppose that E = 1.4. Calculate the new quantity supplied at P = 120 and show your work. %3D %3D e. Given your work, calculate the excess supply that results from the price floor. 1.

C. Public good d. Comparative advantage e. Non-discrimination (in the GATT/WTO system) 3al 2. Consider a market in equilibrium where P = 100 and Q = 200. %3D Draw a supply and demand diagram of this equilibrium and label the equilibrium price and quantity. Next draw a price floor at P = 120 and show what happens to quantity demanded and quantity supplied in your diagram. a. b. Show and explain what happens to consumer surplus as a result of this price floor (you don't have to make any calculations here). c. Suppose that E = -0.8. Calculate the new quantity demanded at P = 120 and show your work. %3D d. Suppose that E = 1.4. Calculate the new quantity supplied at P = 120 and show your work. %3D %3D e. Given your work, calculate the excess supply that results from the price floor. 1.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

Only typed answer and please don't use chatgpt (I)Consider the market for milk in Saskatchewan. If p is the price of milk (cents per litre) and Qis the quantity of litres (in millions per month), suppose that the demand and supply curves formilk are given by: Demand: p = 225 -15QD Supply: p = 25 + 35QS a.Assuming there is no government intervention in this market, what is the equilibrium price and quantity? Equilibrium Price = $165 Quantity = 4Liters b. Now suppose the government guarantees milk producers a price of $2 per litre and promises to buy any amount of milk that the producers cannot sell. What are the quantity demanded and quantity supplied at this guaranteed price? Please answer B.
Q4. Assume the market of non-medical masks can be described by the following equations: Demand: QD= 20 - P Supply: QS=2P-10 Where the quantity QP and QS are in millions, and price P is in dollars. Suppose all the masks are imported, and government decided to set a quota at 5 million units. a) Compute the pre-quota equilibrium price and quantity and illustrate your answers graphically. b) In your graph of a) Clearly show the con umer surplus (CS) and producer surplus (PS) before and after the quota. c) Show the dead weight loss (DWL) in the graph and calculate it.
Q_{D}=400-20 P \\ Q_{S}(\text { Domestic })=30 P-30 \\ Q_{S}(\text { Imported })=10 P-50 \end{array} \] The demand and supply functions for productAare given above. a. The government imposes a price ceiling at 4 . In this case, specify the market price, quantity. In this case, is there either excess supply or excess demand? How much? b. The government imposes a price floor at 9 . In this case, specify the market price, quantity. In this case, is there either excess supply or excess demand? How much? c. The government wants to impose taxes on this product. If the tax is 3 for each sale, find the new market price and quantity. how much of this quantity is coming from imported? d. According to the policy applied in the (c), find the tax share of suppliers and consumers. e. In order to protect the domestic producer, the government imposed tax=2on the imported product. Under new policy, calculate market price and quantity. f. According to the policy applied in the (e), has the policy of the…
Examine the diagram then for the market for cigarettes with the tax. Indicate: I. Price received by producers? a. 18 b 4 c. 8 d. 12 e. 3 f. 7 g. 10 ii. Quantity of cigarettes? a. 18 b 4 c. 8 d. 12 e. 3 f. 7 g. 10 iii. Price paid by consumers? a. 18 b 4 c. 8 d. 12 e. 3 f. 7 g. 10 iv. the tax? a. 18 b 4 c. 8 d. 12 e. 3 f. 7 g. 10
Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium(i.e., supply equals demand in each case). Assume further that a good harvest impactsthe world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. (b) Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers, and whiskey producers?
need help with question 2 (a) Draw the demand and supply curves from the data in Table 1. (b) What is the equilibrium quantity demanded and supplied? The government now imposes a specinc tax of £3 per unit. (c) Show the effect of this on the diogram (d) Whot is the new equilibrium quantity demanded and supplied? (e) What is the new equilibrium price?' (f What is the incidence of tax per unit on i) the consumer and (i) the producer? (g) What is (1) the tax per unit and (i) total government revenue from the tox? (h) By how much will the before tox revenue or producers changer
Q^d= 9.5 - 2p Q^s= 0.6p Tax. Suppose that the government imposes a tax equal to T = 0.50 which buyers must pay for every donut they purchase. (a) How does this tax change the supply and/or demand curve for donuts? (b) Solve for the new equilibrium price and quantity of donuts. Give the price paid by the buyer and the price received by the seller. (c) Draw a single supply and demand diagram that compares the equilibrium with and without the tax. Be sure to indicate the equilibrium quantity of donuts sold as well as the price paid by buyers and the price received by sellers in each case. On the same diagram, indicate the areas which represent consumer and producer surplus, tax revenue and the deadweight loss arising from this tax. (d) Calculate the amount of producer and consumer surplus at this new equilibrium price and quantity, as well as the amount of tax revenue and the deadweight loss. (e) Is the total surplus higher, lower, or the same as in question one? Give an…
In an effort to reduce alcohol consumption, the government is considering a tax$1 for every gallon of liquor sold (tax imposed on manufacturers). Supposethe demand curve is Q D = 500,000 - 20,000 P (where Q D is the number of gallons of drinkliquor demanded and P is the price per gallon), and the liquor supply curve isQ S = 30,000 P (where Q S is the number of gallons supplied).a. Calculate how the tax affects the price paid by consumers and the price paidaccepted by the manufacturer.b. What is the tax revenue for the government? How much incomecome from consumers, and how much from producers?c. Suppose the demand for liquor is more elastic for younger drinkers thanolder drinker. Will the liquor tax be more, less, or the sameeffective in reducing alcohol consumption among young drinkers?Explain.
Q^d= 9.5 - 2p Q^s= 0.6p Tax. Suppose that the government imposes a tax equal to T = 0.50 which must be paid by buyers for every donut they purchase. (a) How does this tax change the supply and/or demand curve for donuts? (b) Solve for the new equilibrium price and quantity of donuts. Give the price paid by the buyer and the price received by the seller. (c) Draw a single supply and demand diagram that compares the equilibrium with and without the tax. Be sure to indicate the equilibrium quantity of donuts sold as well as the price paid by buyers and the price received by sellers in each case. On the same diagram, indicate the areas which represent consumer and producer surplus, tax revenue and the deadweight loss arising from this tax. (d) Calculate the amount of producer and consumer surplus at this new equilibrium price and quantity, as well as the amount of tax revenue and the deadweight loss. (e) Is total surplus higher than, lower than or the same as in question one? Give an…
Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world's sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. (i)Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
PDemand QDemand PSupply QSupply $10 0 $1 2 $9 3 $2 4 $8 6 $3 6 $7 9 $4 8 $6 12 $5 10 $5 15 $6 12 $4 18 $7 14 If the Government creates a quota of 6 units to reduce the consumption of the dangerous product, what will the price of the good be in the marketplace? How much deadweight loss is there? How much of the deadweight loss came from the consumers?
use diagramsa. What is the effect on the equilibrium price and quantity traded in market of theintroduction of a new technology that reduces costs of production for all firms?b. What is the effect on the equilibrium price and quantity traded in a market of a changein tastes that reduces the demand for the product?c. What is the effect on the equilibrium price and quantity traded in a market of theimposition of a tax per unit sold on suppliers?d. What is the effect on the equilibrium price and quantity traded in a market of thepayment of a subsidy per unit sold paid to suppliers?