PART I Carefully read the following statements and represent them graphically using demand and supply curves or model. Label the graph adequately 1. Typhoon Rai damaged the rice fields in Albay, this caused the price of rice in the area to rise. 2. Rosario is excited to see many more milktea shops popping up in their small town of Legazpi, because she said it will reduce the price of milktea and more variety to choose from. 3. Filipino onion farmers are worried that with the rise in imported onions in the country, this will lead to a lower price for their locally produced onions and also lower quantities sold. 4. The price of flour has risen, and bagels fans are now having to put up with a more expensive bagel. This worries cream cheese producers because it will reduce their equilibrium price and quantity 5. Maria feels worried about the shortage in unprocessed tamarind because its price will increase. If it keeps going up, he knows it will squeeze his profits from tamarind candies he sells because even if he just increase the price by 2 pesos, from a 10-peso per pack, the drop of quantity demanded will be greater due to high presence of substitutes. PART IL The demand schedule and supply schedule for a market for a particular good is given in the table below. Use the data to answer the questions that follow. Price 50 $1 $2 $3 $4 $5 $6 Quantity Demanded 15 13 11 9 7 5 Quantity Supplied 0 3 6 9 12 15 18 1. At what least price would a price floor be effective? 2. At what most price would a price ceiling be effective? 3. If the market was not allowed to adjust to equilibrium due to the $6 price floor imposed, how much consumer surplus is lost? And how much of that is the deadweight loss? 4. If the market was not allowed to adjust to equilibrium due to the $2 price ceiling imposed, how much producer surplus is lost? And how much of that is the deadweight loss? 5. What is the equilibrium price and quantity?
PART I Carefully read the following statements and represent them graphically using demand and supply curves or model. Label the graph adequately 1. Typhoon Rai damaged the rice fields in Albay, this caused the price of rice in the area to rise. 2. Rosario is excited to see many more milktea shops popping up in their small town of Legazpi, because she said it will reduce the price of milktea and more variety to choose from. 3. Filipino onion farmers are worried that with the rise in imported onions in the country, this will lead to a lower price for their locally produced onions and also lower quantities sold. 4. The price of flour has risen, and bagels fans are now having to put up with a more expensive bagel. This worries cream cheese producers because it will reduce their equilibrium price and quantity 5. Maria feels worried about the shortage in unprocessed tamarind because its price will increase. If it keeps going up, he knows it will squeeze his profits from tamarind candies he sells because even if he just increase the price by 2 pesos, from a 10-peso per pack, the drop of quantity demanded will be greater due to high presence of substitutes. PART IL The demand schedule and supply schedule for a market for a particular good is given in the table below. Use the data to answer the questions that follow. Price 50 $1 $2 $3 $4 $5 $6 Quantity Demanded 15 13 11 9 7 5 Quantity Supplied 0 3 6 9 12 15 18 1. At what least price would a price floor be effective? 2. At what most price would a price ceiling be effective? 3. If the market was not allowed to adjust to equilibrium due to the $6 price floor imposed, how much consumer surplus is lost? And how much of that is the deadweight loss? 4. If the market was not allowed to adjust to equilibrium due to the $2 price ceiling imposed, how much producer surplus is lost? And how much of that is the deadweight loss? 5. What is the equilibrium price and quantity?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
Problem 8PA
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Question
Transcribed Image Text:PART I.
Carefully read the following statements and represent them graphically using demand and
supply curves or model. Label the graph adequately,
1. Typhoon Rai damaged the rice fields in Albay, this caused the price of rice in the area to rise,
2. Rosario is excited to see many more milktea shops popping up in their small town of Legazpi,
because she said it will reduce the price of milktea and more variety to choose from.
3. Filipino onion farmers are worried that with the rise in imported onions in the country, this will
lead to a lower price for their locally produced onions and also lower quantities sold.
4. The price of flour has risen, and bagels fans are now having to put up with a more expensive
bagel. This worries cream cheese producers because it will reduce their equilibrium price and
quantity.
5. Maria feels worried about the shortage in unprocessed tamarind because its price will
increase. If it keeps going up, he knows it will squeeze his profits from tamarind candies he sells
because even if he just increase the price by 2 pesos, from a 10-peso per pack, the drop of
quantity demanded will be greater due to high presence of substitutes.
PART II.
The demand schedule and supply schedule for a market for a particular good is given in the
table below. Use the data to answer the questions that follow.
Price
$0
$1
$2
$3
$4
$5
$6
Quantity Demanded
15
13
11
9
7
5
3
Quantity Supplied
0
3
6
9
12
15
18
1. At what least price would a price floor be effective?
2. At what most price would a price ceiling be effective?
3. If the market was not allowed to adjust to equilibrium due to the $6 price floor imposed, how
much consumer surplus is lost? And how much of that is the deadweight loss?
4. If the market was not allowed to adjust to equilibrium due to the $2 price ceiling imposed, how
much producer surplus is lost? And how much of that is the deadweight loss?
5. What is the equilibrium price and quantity?
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