Click on the icon to read the news clip, t The graph shows the market for milk in Vene- Draw a shape that represents: 1) consumer surplus. Label it CS. 2) producer surplus. Label it PS. 3) the deadweight loss. Label it DWL. Also draw a shape that show the resources H Loss. *** Moving from a milk market with no price con consumer surplus and pre A. increases; increases B. increases; decreases OC. decreases; increases OD. decreases; decreases In the market for cheese, A. consumer surplus decreases and pr
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- 39) A student wrote: "A production quota is inefficient because it results in overproduction. At the quota quantity, marginal social cost is equal to the market price and marginal social benefit is less than the market price, so marginal social cost exceeds marginal social benefit." If you were the instructor, how would you correct this statement? 40) When the government passes a law making a particular good illegal, does it matter for the black market price and quantity if the penalties for breaking the law are imposed on the buyers or on the sellers? 41) In 1920 a constitutional amendment was passed that outlawed the production, sale, purchase, and consumption of alcoholic beverages. "Prohibition" encouraged bootlegging and black markets for whiskey, wine, and beer. The amendment was eventually repealed in 1933. In 1920, what alternative economic policy was available to the government as a means of reducing alcohol consumption nationwide?Answer the following questions with the graph and match the key words with the correct box. a) before the government imposes its regulation, what is the price of the crab? b) What is the demand price after the quota? c) What is the quota for the crab?In addition to the image calculate the following: I) The consumer surplus ii) The producer surplus iii) the deadweight loss
- China is a major producer of grains, such aswheat, corn, and rice. Some years ago, the Chinesegovernment, concerned that grain exports weredriving up food prices for domestic consumers,imposed a tax on grain exports.a. Draw the graph that describes the market for grainin an exporting country. Use this graph as thestarting point to answer the following questions.b. How does an export tax affect domestic grainprices?c. How does it affect the welfare of domesticconsumers, the welfare of domestic producers,and government revenue?d. What happens to total welfare in China, asmeasured by the sum of consumer surplus,producer surplus, and tax revenue?Draw a graph that shows the agricultural market in equilibrium with a binding price floor. Label equilibrium price, equilibrium quantity, and changes in consumer surplus, producer surplus, and deadweight loss on the graph. Is this prioce floor guaranteed to make producers better off?The following graph shows the market for milk. The market price of milk without government intervention is____________per gallon. Consider the legislation that doesn't allow the price of milk to be below $8 per gallon and stimulates that the government by any surplus milk produced at that price. In order to raise the price of $8 per gallon, the government would need to buy______million gallons of milk, which would cost the government__________million. Suppose there are only a few dairy Farmers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $8 per gallon would mean which of the following? The legislation will probably pass because it's benefits are concentrated while it's cost or widespread. The legislation should pass because it's economical efficient, but it probably won't because consumers don't understand enough about economics. The legislation may or may not pass since…
- Please answer the all questions 45,46,47,48,49,50!!!!!!!!!!! 45. Before the price controls, the consumer surplus is:a) A+B+E b) C+D+F c) A+B+C d) D46. Before the price controls, producer surplus is:a) A+B+E b) C+D+F c) A+B+C d) D47. After the price controls, the consumer surplus is:a) A b) C+D+F c) B+C+D d) D48. After the price controls, producer surplus is:a) A b) C+D+F c) B+C+D d) D49. The impact of the price control on producer surplus is:a) -C-F b) E+F c) B-F d) C+F50. The deadweight loss caused by the price control is:a) -C-F b) -E-F c) -B-E d ) C+FSuppose the world price of oil is $15 per barrel. At that price, the United States imports 400 million barrels daily and consumes 600 million barrels daily. The government then imposes a $5 per barrel tax on oil imports. For every dollar increase in oil prices, domestic consumption decreases by 20 million barrels per day, while domestic production increases by 40 million barrels per day. 3. What will be the cost of inefficient production, loss in consumer surplus, and deadweight loss? Use a diagram to help answer the question.Suppose the demand and the supply for lumber (harvested wood processed in a sawmill) used for construction in Australia are given byQD =100 – 2PQS = 1/2PAssume also that the market is perfectly competitive.Suppose the lumber market described was closed to the rest of the world. Now it opens to trade and the world price of lumber is 20. Compute the equilibrium price, quantity supplied by domestic producers, and quantity demanded by domestic consumers.2.Use a demand and supply graph to show how consumer surplus, producer surplus, and total surplus change with international trade.3. Now suppose that Country A is a major exporter of lumber to Australia and in an effort to impose sanctions on Country A, Australia imposes a tariff of t=10 on all lumber imported into Australia. Use a graph of supply and demand to show how the tariff changes consumer, producer and total surplus.4. Calculate the equilibrium price, quantity produced and demanded domestically, tariff revenue, and deadweight loss.
- The world price of cotton is below the no-trade price in Country X and above the no-trade price in country Y. Using supply and demand diagrams, show and compare the gains from trade in each country. The market for pizza is characterized by a downward-sloping demand curve and an upward-sloping supply curve. Draw the competitive market equilibrium. Label the price, quantity, consumer and producer surplus. Is there any deadweight loss? Explain. Suppose that the government forces each pizza house to pay a Php2 tax on each pizza sold. Illustrate the effect of this tax on the pizza market. Label the consumer surplus, producer surplus, government revenue, and deadweight loss. How does each area compare to the pre-tax case?Q/ Ivan has inherited his grandmother’s 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested and willing to pay up to $72,000. Would Ivan and Samantha voluntarily engage in trade? How much economic surplus is created for both of them as a result of this exchange? What is the total economic surplus?Russia trades chocolate with France, where it is a staple. The government of Russia places a price floor on their market for chocolate (assume that it is binding). They buy the surplus of 4 units from the producers and sell it in France. Refer to the graph to determine what happens when the government then sells the excess on the world market (to France). The government of Russia charges $7 in order to sell four units of chocolate in France. Determine who is better off and worse off.