Refer to the figure to answer the following two questions. P 165 150 S 135 120 105 90 75 60 45 30 15 Q 0 80 160 240 320 400 480 560 640 720 800 880 1) If the government imposes a binding price floor of $135.00 in this market, what is the result? a. There will be al of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $15.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

Refer to the figure to answer the following two questions. P 165 150 S 135 120 105 90 75 60 45 30 15 Q 0 80 160 240 320 400 480 560 640 720 800 880 1) If the government imposes a binding price floor of $135.00 in this market, what is the result? a. There will be al of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $15.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 2CQQ

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28. What is the size of producer surplus when Price Floor of $9 is imposed? 29. What is the size of deadweight loss from Price Floor of $9? 30. What is the size of social surplus when Price Floor of $9 is imposed?31. What is the difference between total surplus before and after price control is imposed?32. How does this number compare to the DWL
The demand and supply of corn are as follows: Qd = 2,100 - 125P Qs = 600 + 175P, where quantities are in millions of bushels and prices are in dollars per bushel. (d) ALTERNATIVELY, assume that the government introduces a production quota of 1.35 billion bushels, i.e., Q = 1,350. Calculate: (i) the change in the consumer surplus (ii) the change in the producer surplus (iii) the deadweight loss (e) ALTERNATIVELY, assume that the government gives producers FINANCIAL INCENTIVES to limit output to 1.35 billion bushels, i.e., Q = 1,350. Calculate: (i) the change in the consumer surplus (ii) the change in the producer surplus (iii) the cost to the government (iv) the deadweight loss
5.Given the following information Q_d= 240 – 5p , Q_s = P Where Q_d is the quantity demanded, Q_s is the quantity supplied and P is the price. What is the Consumer surplus before the tax? 6.Given the following information Q_d = 240 – 5p , Q_s = P Where Q_d is the quantity demanded, Q_s is the quantity supplied and P is the price. What is the Producer surplus before the tax?
Use the accompanying graph to answer these questions. a. Suppose demand is D and supply is S0. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? b. Suppose demand is D and supply is S0. If a price support of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? c. Suppose demand is D and supply is S0 so that the equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? d. Calculate the level of consumer and producer surplus when demand and supply are given by D an respectively. e. Suppose demand is D and supply isb.
Question 3 The market demand and supply functions for cotton are: QD =10–0.04PandQS =38P–20. Calculate the consumer and producer surplus. To assist cotton farmers, suppose a subsidy of R0.10 a unit is implemented. Calculate the new level of consumer and producer surplus. Did the increase in consumer and producer surplus exceed the increased government spending necessary to finance the subsidy?
Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay for a good or service. ... The producer surplus is the difference between the actual price of a good or service–the market price–and the lowest price a producer would be willing to accept for a good. Given the following information, calculate both the producer and consumer surplus a. P- 140 = - .5q b. MC = 10 + 4q
Multiple choice questions - Micro 11) Refer to Figure 8-6. If the tax is imposed on the buyer, what price would the sellers receive for their product? A. $16 B. $2 C. $10 D. $6 10) What does a binding price floor cause? A. a drop in the equilibrium price B. a shortage C. a surplus D. excess demand
C) Given the following information: QD- 240-5P QS= P Where QD is the quantity demanded, QS is the quantity supplied and P is the price. Suppose the government decided to impose tax of $12 per unit on sellers in this market. Determine: 1.Consumer surplus after tax 2. producer surplus after tax 3. tax revenue 4. deadweight loss of the tax 5. total surplus after tax
Quantity Demanded: QD= 240-5P Quantity Supplied: QS= P Find the equilibrium price and quantity before tax, buyers and sellers reservation price and consumer and producer surplus before tax. Suppose the government decides to impose a tax of $12 per unit on sellers, determine the demand and supply equation after tax. Determine the buyers and sellers price, quantity, consumer surplus and producer surplus after tax, tax revenue, deadweight loss of the tax and the total surplus after tax.
The demand and supply of corn are as follows: Qd = 2,100 - 125P Qs = 600 + 175P, where quantities are in millions of bushels and prices are in dollars per bushel. (a) Assume that the government introduces a price floor of $8 per bushel. Assume that suppliers produce the quantity that consumers will buy at the resulting price. Calculate: (i) the change in the consumer surplus. (ii) the change in the producer surplus. (iii) the deadweight loss (b) ALTERNATIVELY, assume that the government introduces a price floor of $8 per bushel, but suppliers produce the quantity that they are WILLING to sell at the resulting price. Calculate: (i) the change in the consumer surplus (ii) the change in the producer surplus (iii) the deadweight loss (c) ALTERNATIVELY, assume that the government supports a price of $8 per bushel by buying the resulting excess supply. Calculate: (i) the change in the consumer surplus (ii) the change in the producer surplus (iii) the cost to the…
Suppose the equations below represent the market supply and demand for cellular service. QD = 50 – 0.25P QS = 2P – 76 a. Graph the supply and demand curves, and label the equilibrium quantity and price. b. Calculate the amount of Consumer Surplus and Producer Surplus in this market. c. Suppose the government enacts a per-unit tax of $9 for each unit sold. Illustrate the effect of this tax in your graph of the market for cellular service, and calculate the new market price and quantity sold. d. Calculate the amount of deadweight loss associated with this per-unit tax. e. Calculate the share of the tax burden that the sellers bear. f. Briefly explain why there is a relationship between the slopes of the supply and demand curves, and the tax burden on each side of the market.
21-24. The market for concert tickets to see the pop singer Pink has the following supply and demand curves: Supply: P = 20 + 0.0015Q Demand: P = 500 – 0.0025Q Initially, the market is in equilibrium at P = $200, Q = 120,000. Questions 21 to 24 concern this market. 21. The government places a $35 per unit tax on the buyers of concert tickets. At the new equilibrium, the price paid by buyers (including the tax paid and to the nearest cent) will be: A) $200 B) $201.67 C) $205 D) $235 E) $205.83 F) $221.88 G) $186.88 H) $165 I) $278.13 J) None of the above 22. Now suppose that the government alters its policy so that the $35 per unit tax is now placed on the sellers of concert tickets instead of on the buyers. Economic theory tells us the following: A) the buyers’ share and the sellers’ share are reversed by the change in policy B) the buyers’ share and the sellers’ share are not affected by the change in policy C) the shares are affected by the change in policy, but exactly how depends…