GRAPH ANALYSIS Referring to the graph below, explain how: (a) An excess of supply might be created by government prices supports for wheat; and (b) How an excess of demand might be created by rent control.
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- Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start a new graph for each question.) Your diagrams must include competitive market equilibrium and post-government intervention: prices, quantities, consumer/producer/total surpluses, and dead-weight-losses. A price ceiling is imposed on rental apartments A price floor in form of the minimum wage. Solar panels are subsidized. An excise tax is placed on sugary drinks.Draw supply and demand curves for the labor market. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? If the current market wage is $10.50, how does the labor market adjust back to the equilibrium? If a minimum wage of $8.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? Using the supply and demand graph in part (a) above, illustrate the effect of the price control.Draw the supply and demand curves based on the following market data price . quantiy demand. quantity supplied 10 100 0 12. 80 20 14 60 40 16 40 60 18 20 80 20 0 100 What is the market equilibrium or clearing price? What condition would prevail if the price is set at $12 by the government? How would this affect the market efficiency (e.g production possibilities)? What is required to restore the market equilibrium or clearing process?
- Suppose the rent control (price ceiling) in Canada will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. a) In a diagram, show the effect on the market for apartments the elimination of rent control. What will happen to the quality and quantity of rental housing supplied by the apartment owners? b) Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a)Assume that as the economy booms, the demand for business and consumer loans rises significantly, while the supply of funds and loans remains constant. As a result, the market interest rate for business and consumer loans rises to 20% per year. The government implements a ceiling on interest rates of 15% a year and as a result... Group of answer choices The quantity demanded of business and consumer loans rises, while the quantity supplied falls and a surplus occurs A greater number of business and consumer loans are made at a lower interest rate than previously. The demand of business and consumer loans rises, while the supply falls and a shortage occurs The quantity demanded of business and consumer loans rises, while the quantity supplied falls and a shortage occursSuppose the rent control (price ceiling) in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. a. In a diagram, show the effect on the market for apartments the elimination of rent control. What will happen to the quality and quantity of rental housing supplied by the apartment owners? b. Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a) c. Are the renters or tenants better or worse off as a result of these policies? What about the rentees or the…
- c. If, in seeking to increase opportunities for lower income families, the government significantly increases subsidies available for individuals to pursue a college education, the point representing the equilibrium wage and quantity of workers will move up and to the right along the market supply curve for labor. the market supply curve for labor will shift to the right. the point representing the equilibrium wage and quantity of workers will move down and to the left along the market supply curve for labor. the market supply curve for labor will shift to the left.Consider a market where demand and supply satisfy the following equations Q D = 12 – 2 P, QS = 2P. Find the current equilibrium price and quantity. What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. 3.Explain by means of graphs how the introduction of a price floor can increase producer surplus. 4.Find the (optimal) price floor that maximizes producer surplus.Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. Find the current equilibrium price and quantity What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. Explain by means of graphs how the introduction of a price floor can increase producer surplus. Find the (optimal) price floor that maximizes producer surplus.
- Use the following information to answer Questions 1 - 3 In a competitive market for whole milk, the market demand is QD = 1000 – 50P and the market supply is QS = 150P, where Q denotes the quantity in gallons and P denotes the price in dollars. [1] Calculate the competitive market equilibrium price? [2] Calculate the competitive market equilibrium quantity? [3] At the competitive market equilibrium price and quantity, calculate the value for consumer surplus? Hint: it might be helpful to construct a graph.Suppose the rent control (price ceiling) in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. In a diagram, show the effect on the market for apartments the elimination of rent control. What will happen to the quality and quantity of rental housing supplied by the apartment owners?Suppose the rent control (price ceiling) in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. In a diagram, show the effect on the market for apartments the elimination of rent control. What will happen to the quality and quantity of rental housing supplied by the apartment owners? Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a) Are the renters or tenants better or worse off as a result of these policies? What about the rentees or the landlords,…