Price P2 D11pm. T 8 am $ is Freeway Space fer to Exhibit 5-1, which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. Suppose that the government decides to set the oney price of driving on the freeway at zero, but creates programs that encourage drivers to carpool. If the carpooling program is sufficiently ccessful to eliminate the shortage of freeway space at 8 a.m., graphically the result of the increase in carpooling would be a a. movement up along D8a.m. to the point where D8a.m. intersects the supply curve. b. rightward shift of the supply of freeway space curve. c. leftward shift of the demand for freeway space curve from D8a.m. to D11p.m. d. leftward shift of the supply of freeway space curve.
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- There are 100 sellers in the market for widgets: 40 people are willing to sell a widget at £10or more; 20 additional people are willing to sell a widget at £20 or more; 30 additional peopleare willing to sell a widget at £30 or more; and 10 additional people are willing to sell awidget at £50 or more. (a) For a range of prices from £0 to £70, draw the supply curve in a suitablylabelled graph. (b) The government will buy any amount of widgets for £40 or less. Draw thedemand curve. How many widgets are sold in equilibrium?Alow-incomecountrydecidestosetapriceceiling on bread so it can make sure that bread is affordable to the poor.Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.40? At $2.00? At $3.60?Suppose that the market for bottled water can be represented by the following equations: Demand: P = 10 - 2QDSupply: P = 1 + 0.5QSwhere P is the price per gallon, and Q represents quantity of purified water, represented inmillions of gallons of water consumed.a) Calculate the equilibrium price and quantity of bottled water.b) Concerned over high water prices after the winter storm, the government sets a priceceiling of $2.25 per gallon of water. What is the new quantity of water sold in themarket? Use supply and demand curves to illustrate your answer, showing both theoriginal equilibrium from part a) and the new quantity sold with the price ceiling.c) Calculate the producer surplus and consumer surplus at the initial equilibrium priceand quantity from part a).d) Calculate the new producer surplus and consumer surplus with the price ceiling frompart b).e) How does the total consumer and producer surplus in part c) compare to the totalconsumer and producer surplus in part d)? What…
- There are 40 people living in a village each having preference over apples andshirts represented by U(a,b) = a1/3s2/3, where a and s are amount of applesin pounds and shirts consumed, respectively. The price of a shirt is $10. Each villager has $300 income. Apples are supplied to the village by a farmer, whose supply function is S(pa) = 1000pa.Part a1What is the equilibrium price of apples? How many pounds of apples does eachvillager consume?Part a2What is the aggregate net consumer surplus at the equilibrium?Part a3What is the price elasticity of demand at the equilibrium?Part b1Suppose 50 more people move in to the village. What is the equilibrium pricenow? Part b2Are consumers better or worse off now? Why? If a consumer is worse off, byhow much additional income he/she needs to be compensated in order to be aswell off as in Part a.Market researches have studied the market for milk,and their estimates for the supply of and the demand for milk per month are as follows:a.Using the data,graph the demand for and the supply for milk.Identify the equilibrium point as E,and use dotted lines to connect E to the equilibrium price onthe price axis and the equilibrium quantity on the quantity axis.b.Suppose the government enacts amilk price support of $8per gallon.Indicate this action on your graph,and explain the effect on the milk market?Why would the government establish such a price support?c.Now assume the government decides to set a price ceiling of $4 dollar per gallon.Show and explain how this legal price effects your graph of the milk market.What objective could the government be trying to achieve by establishing such a price ceiling?Suppose the government of the island has decided to make tomatoes more affordable to consumers by imposing a fixed per unit subsidy. Thus, start with the original demand (Qd = 50 – 5P) and supply (Qs = 5P – 25) and analyze this new intervention, the subsidy. The subsidy works like this: tomato sellers receive a $4 refund from the government for each kilogram of tomatoes they sell to consumers. • Write down the equation for the new "effective supply" curve. • Determine the new equilibrium quantity and equilibrium price. • What is the price that the consumers will pay for their tomatoes? • What is the price that the producers will effectively earn for their tomatoes, inclusive of the subsidy? • How much will the government spend on tomato subsidies in this case in total? (Recall the units of measurement: P is the price in dollars per kilogram of tomatoes; and Q is the quantity of tomatoes, expressed in thousands of kilograms.) • Produce a new graph depicting the new, post-subsidy…
- Suppose the government of the island has decided to make tomatoes more affordable to consumers by imposing a fixed per unit subsidy. Thus, start with the original demand (Qd = 50 – 5P) and supply (Qs = 5P – 25) and analyze this new intervention, the subsidy. The subsidy works like this: tomato sellers receive a $4 refund from the government for each kilogram of tomatoes they sell to consumers. Write down the equation for the new "effective supply" curve. Determine the new equilibrium quantity and equilibrium price. What is the price that the consumers will pay for their tomatoes? What is the price that the producers will effectively earn for their tomatoes, inclusive of the subsidy? How much will the government spend on tomato subsidies in this case in total? (Recall the units of measurement: P is the price in dollars per kilogram of tomatoes; and Q is the quantity of tomatoes, expressed in thousands of kilograms.) Produce a new graph depicting the new, post-subsidy equilibrium…A family has the following utility over childcare, c, and food, f,: U(x,y) = c^1/5 f^4/5. The price of childcare Pc= 2, the price of food Pf= 4, and income I = 20. a) What is the family’s demand for childcare and food? b) Suppose the government gives the family an income subsidy of S = 10. How will the family allocate the subsidy in the consumption of the goods c and f (in other words by how much does the consumption of each of these goods rise)? What is the level of utility attained by the family after the subsidy? c) Suppose now that the government decides to give an in-kind transfer to the family. The in-kind transfer takes the form of 4 hours of childcare and .5 units of food. Assume that the transfer cannot be re-sold. Draw a carefully labeled graph where you show that the pre- and post transfer budget constraint. d) What are the new consumption levels after the in-kind transfer is given? What is the level of utility attained by the family at this consumption level? Thank you for…A family has the following utility over childcare, c, and food, f,: U(x,y) = c^1/5 f^4/5 . The price of childcare Pc= 2, the price of food Pf= 4 and income I = 20. a) What is the family’s demand for childcare and food? b) Suppose the government gives the family an income subsidy of S = 10. How will the family allocate the subsidy in the consumption of the goods c and f (in other words by how much does the consumption of each of these goods rise)? What is the level of utility attained by the family after the subsidy? c) Suppose now that the government decides to give an in-kind transfer to the family. The in-kind transfer takes the form of 4 hours of childcare and .5 units of food. Assume that the transfer cannot be re-sold. Draw a carefully labeled graph where you show that the pre- and post transfer budget constraint. d) What are the new consumption levels after the in-kind transfer is given? What is the level of utility attained by the family at this consumption level?
- If the government establishes a support price for sugar $12 per cwt. (Hundered pounds) and is willing to buy up any surplus sugar at that price, indicate on your graph the quantity supplied, quantity demanded, and quantity purchased by the government. If the units are million cwt, how much money is required for the government purchases? Show this amount on your graph. Demand for sugar is: Q = 20 - PSupply for sugar is: Q = 2 + P I have calculated that the equilibrium is P = 9 and Q = 11 quantities are in million hundred weight (cwt) and price is dollars per cwt.warring ( i just want the answer for C ) A- Given the following two equations:Qd = 150 – 3PQs = 70 + 2P Calculate the equilibrium price and the equilibrium quantity. Show all your work.B- Using the above two equations to find the values of Qd, Qs, the market situation (Shortage/Surplus/Equilibrium), and the Value of shortage or surplus if any, at the following prices.10, 15,20 and 25. C-If the consumer income increases by 20%, what will happen to the equilibrium price and quantity. warring ( i just want the answer for C )2.2.4 Considering curves D and S, if the government intervenes and sets a price of R26, this Is called ........... .............. and will result in a ......................... of 40 cups of coffee. 2.2.5 Consider demand(D) and supply(S1). if the government sets a price of R18 for a cup of coffee, then the .............. .................... will be 140 cups of coffee