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- The equations below represent the demand and supply curves for annual gym memberships in a certain city. qD= 500 − 2p, qs= 0.5p − 50 Assume that the city government offers a per-unit subsidy of $25 to those who sign up for an annual gym membership. a. Find the equilibrium pre and post subsidy. What share of the subsidy benefit accrues to the buyers? b. Do a welfare analysis comparing consumer surplus, producer surplus, and total surplus pre and post subsidy. Is there a deadweight loss associated with the implementation of this subsidy? Graph ypur answerPDemand 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?If Sam is willing to pay $50 for one good X, $30 for a second, $20 for a third, $8 for a fourth, and the market price is $10, then Sam’s consumer surplus isa. $10. b. $40. c. $70. d. $100. PreviousNext
- When people pay less for something than it is worth to them, they receive what is called a(n) ______. Question 3 options: a) consumer surplus b) economic benefit c) deadweight loss05. Quantity demanded at price = 6 is a) 4 b) 8 c) 12 d) 14 e) 20The weeknight demand for beer in Georgetown is given by Q,=13,500-1,500P while the supply for beer can be described by Q=3000P. A government-commissioned study found that wondering bands of inebriated Georgetown students with aggressive electric-scooter ridership has creating an additional negative social cost of $1 per-beer sold. Graphically identify and mathematically measure any deadweight loss from the beer market in Georgetown.
- Your grandmother likes old-fashioned yard salesand doesn’t understand why everyone is so excitedabout eBay. Explain to her why the creation of amarket that enables people who don’t live in thesame town to buy and sell used goods increasestotal surplus over the yard-sale market.P 2 3 4 5 6 7 8 9 10 11 12 Qs 100 200 300 400 500 600 700 800 900 1000 1100 QD 550 500 450 400 350 300 250 200 150 100 50 Now imagine that there is a price ceiling on coconuts at $3 but in order to prevent wasting peoples' time by making them wait in line, the government hands out ration coupons to people. In order to buy a coconut you need a coupon. Assume that the number of coupons is the appropriate number to clear the market with the price ceiling (you should know what that is). Now notice that the government probably doesn't know who has the highest marginal value for coconuts so, while this will eliminate the waste from the line it will most likely not allocate the coconuts efficiently. However, we can solve…The supply and demand model for 2lb bags of oranges can be represented by: Ps = 8 + 2Qs Pd = 15 - 1.5Qd The government imposes a price floor of $6/ bag What would be the consequences? Group of answer choices It would immediately benefit only consumers It would immediately benefit onlyproducers There would be no change in the market It would immediately benefit both producers and consumers There would be no legal trade for this product
- Based on the answers calculated here, what we can infer? Consumer surplus = Area of A+B+E =((30-20) x 2000/2) = 10000 Producer surplus = Area of C+D+F =((20-10) x 2000/2) = 10000 New Consumer surplus = Area of A+B+C = 2500+5000+5000 = 12500 Increase in consumer surplus = C - E =5000-2500 = 2500 New producer surplus = Area of D = 2500 Decrease in producer surplus = Area of C + F = 5000+2500 = 7500 Deadweight loss = Net loss in social welfare = Area of E + F =((25-15) x (2000-1000)/2) = 5000The market for phones is perfectly competitive. Suppose for simplicity, we have the potential buyers below with their Willingness to Pay (WTP) for a phone. Every person buys only 1 phone if they buy a phone. If market price for a phone is $715, what is Consumer Surplus in the market? Person WTP A $651 B $374 C $574 D $1,223 E $550 F $1,517Given: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer. Calculate the following (c) Consumer surplus after the tax. (d) Producer surplus after the tax. (e) Deadweight loss. (f) Government revenue
