Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants without causing the world price to rise. Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? billion (Enter a numeric response using a real number rounded to two decimal places using the correct sign) Price of ethanol (per gallon) 2.80 2.00 2.40 2.00 1.80 1.00- 1.40- 1.20 1.004 0.80 0.00 0.40 0.20 0.00 Quantity of ethanol Supply

Economics: Private and Public Choice (MindTap Course List)
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Chapter6: The Economics Of Political Action
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Problem 15CQ
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Economics 

 

Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world
price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants
without causing the world price to rise.
Now suppose a quota eliminating trade is imposed by the government.
What is the dollar amount of the change in consumer surplus as a result of the quota?
a numeric response using a real number rounded to two decimal places using the correct sign)
billion. (Enter
Price of ethanol (per gallon)
2.80
2.60
2.40-
2.20-
2.00-
1.80
1.60
1.40
1.20
1.00-
0.80-
0.60-
0.40
0.20
0.00+
Supply
Demand
Quantity of ethanol (billion gallons per year)
GOO
Transcribed Image Text:Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants without causing the world price to rise. Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? a numeric response using a real number rounded to two decimal places using the correct sign) billion. (Enter Price of ethanol (per gallon) 2.80 2.60 2.40- 2.20- 2.00- 1.80 1.60 1.40 1.20 1.00- 0.80- 0.60- 0.40 0.20 0.00+ Supply Demand Quantity of ethanol (billion gallons per year) GOO
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