"Senior citizens often pay lower prices and movie theaters and restaurants, because they get a "senior discount" (e.g. a 10% price reduction). Standard producer theory provides only one possible reason for that." Provide a good explanation of your answer
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- Education benefits society as a whole. That is why, among other things, studies at colleges and universities are subsidized: Students pay for the semester ticket, while the state covers the cost of courses, among other things. Assume that the subsidy is paid as a fixed amount per student.4a) What is the form of market failure that economically justifies the education subsidy? Briefly justify your answer.4b) What is the effect of the subsidy and what are its welfare effects? Assume an optimally designed subsidy and give reasons for your answer.4c) Does it make a difference whether the subsidy is earmarked and paid directly to the students or to the respective university? Give reasons for your answer.In Country Faraway, cigarettes are forbidden, so people trade cigarettes in a black market. The cigarette demand is QD = 12 − P , and the cigarette supply is Qs = 2P . Find the equilibrium price and quantity in the black market. The government becomes aware of the black market and reinforces the police so that half of the cigarette supply would be seized and destroyed. Under this circumstance, what are the demand and supply functions? What is the new equilibrium price and quantity? Show the change by using a supply and demand diagram.The UK govenment has decided that the high consumption of alcohol is now becoming a global threat to public health. For this reason, the government decides to impose a £2 per pint tax on alcohol sold. Use market equilibrium analysis to argue the effectiveness of this policy. Ensure to include one or more graphs to explain your reasoning.
- In an effort to increase long run supply of output in a market, the government decides to implement policies that remove existing barriers to entry, so the market now has free-entry. At the same time, the government also implements policies that restrict exit from the market (e.g. firms must pay a sizable fee to exit the market). Proponents of the policies claim that allowing firms to easily enter the market, but not easily exit the market, will increase long run supply. Considering producer theory, will such policies have the desired consequences? Provide economic reasoning.After the devastating typhoon Haiyan in the Philippines, the government and donor agencies embarked on rehabilitating rice production to avoid hunger and starvation. As a result, Philippines experienced a rice bumper harvest which led to the equilibrium price to decrease to AUD 1.50 per kilogram. To reduce poverty, the government decided to increase the price of rice to AUD 2.00 per kg. Suppose the figure below represents rice production by Jane a farmer in rural Philippines, answer the questions below. Examine the effect of government price legislation on Jane a farmer in rural Philippines Calculate the price elasticity of demand using the midpoint formula for rice What is the price elasticity of demand for rice? Based on your answer, is rice a necessity? Explain your answer.After the devastating typhoon Haiyan in the Philippines, the government and donor agencies embarked on rehabilitating rice production to avoid hunger and starvation. As a result, Philippines experienced a rice bumper harvest which led to the equilibrium price to decrease to AUD 1.50 per kilogram. To reduce poverty, the government decided to increase the price of rice to AUD 2.00 per kg. Suppose the figure below represents rice production by Jane a farmer in rural Philippines, answer the questions below. Examine the effect of government price legislation on Jane a farmer in rural Philippines Calculate the price elasticity of demand using the midpoint formula for rice. What is th elasticity of demand for rice? Based on your answer, is rice a necessity? Explain your answer.
- When does a producer surplus occur? a. when individuals pay less than the maximum amount they would have been willing to pay for a good or service b. when producers sell a product for the exact minimum amount they would be willing to accept c. when producers sell a product for less than the minimum amount they would be willing to accept d. when producers sell a product for more than the minimum amount they would be willing to acceptExplain why economist usually oppose controls on prices.which statement is correct A result of welfare economics is that the price of a product is considered to be the best price because it maximizes total surplus. A seller would be willing to sell a product only if the price received is less than the cost of production. Suppose that the equilibrium wage in the labor market is $8.00 per hour of labor. If a law increased the minimum wage from $7.25 to $10.00 per hour of labor, any possible increase in producer surplus would be smaller than the loss of consumer surplus. In a market, for any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.
- (ALL OWNERSHIP GOES TO CENGAGE) The following graph plots a supply curve (orange line) for a group of recent graduates looking to sell used air fryers. Each seller has only a single used air fryer available for sale. Think of each rectangular area beneath the supply curve as the “cost,” or minimum price that each seller is willing to accept. Assume that anyone who has a cost that equals the market price is willing to sell their used air fryer. (image below) Region X (the purple shaded area) represents total producer surplus when the market price is equal to $____ , while Region Y (the grey shaded area) represent ___________ when the market price ________. (image below)What is Market Distortion and its potential long-term effect? Please explain thank you.Please Analyze and explain the theory of Demand and Supply (chapter 2) and create thegraph for demonstrating the following scenario and answer the questions:● G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, suchas rice and dry beans. The firm’s manager is concerned about an article he read in thismorning’s Wall Street Journal indicating that the incomes of individuals in the lowestincome bracket are expected to increase by 10 percent over the next year. While the BUS 505 Hybrid Syllabus 7 manager is pleased to see this group of individuals doing well, he is concerned aboutthe impact this will have on G.R. Dry Foods.o Please explain what will happen to the price of the products G.R. Dry Foods sells?o Why?
