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The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. Suppose the government buys the equilibrium quantity of hay determined by demand and supply during the drought. and the price of a bale Total surplus is pre-drought price. OA. maximized; rises OB. maximized; falls Oc. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus compared to the compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. purchased, and the price of a bale OA. increases; falls OB. decreases: falls Price (dollars per bale) 0 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 Quantity demanded during before drought drought (thousands of bales) 70 40 35 30 25 Quantity demanded 20 15 10 5 0 65 60 55 50 45 40 35 30 Quantity supplied 0 5 10 15 20 25 30 35 . 40

The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. Suppose the government buys the equilibrium quantity of hay determined by demand and supply during the drought. and the price of a bale Total surplus is pre-drought price. OA. maximized; rises OB. maximized; falls Oc. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus compared to the compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. purchased, and the price of a bale OA. increases; falls OB. decreases: falls Price (dollars per bale) 0 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 Quantity demanded during before drought drought (thousands of bales) 70 40 35 30 25 Quantity demanded 20 15 10 5 0 65 60 55 50 45 40 35 30 Quantity supplied 0 5 10 15 20 25 30 35 . 40

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
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The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. A. maximized; rises B. maximized; falls OC. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. purchased, and the price of a bale OA. increases; falls OB. decreases; falls O c. remains unchanged; remains unchanged OD. increases; rises OE. decreases; rises C
Transcribed Image Text:The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. A. maximized; rises B. maximized; falls OC. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. purchased, and the price of a bale OA. increases; falls OB. decreases; falls O c. remains unchanged; remains unchanged OD. increases; rises OE. decreases; rises C
The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. Suppose the government buys the equilibrium quantity of hay determined by demand and supply during the drought. and the price of a bale Total surplus is pre-drought price. ... OA. maximized; rises OB. maximized; falls OC. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus purchased, and the price of a bale compared to the compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. OA. increases; falls OB. decreases: falls M OOO = Quantity demanded Price during Quantity (dollars per before drought drought supplied bale) (thousands of bales) 0 70 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 40 35 30 Quantity demanded 25 20 15 10 5 0 65 60 55 50 45 40 35 30 0 5 10 15 20 25 30 35 40 Next
Transcribed Image Text:The table shows the demand and supply schedules for hay before and during a major drought. During the drought, suppose the government gave all farmers an equal quantity of hay. Resale of hay is not permitted. Suppose the government buys the equilibrium quantity of hay determined by demand and supply during the drought. and the price of a bale Total surplus is pre-drought price. ... OA. maximized; rises OB. maximized; falls OC. less than the maximum possible; falls OD. less than the maximum possible; rises OE. maximized; does not change Suppose the government buys more than the equilibrium quantity of hay and pays the supply price for this quantity. Total surplus purchased, and the price of a bale compared to the compared to the total surplus when the equilibrium quantity is compared to the equilibrium price. OA. increases; falls OB. decreases: falls M OOO = Quantity demanded Price during Quantity (dollars per before drought drought supplied bale) (thousands of bales) 0 70 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 40 35 30 Quantity demanded 25 20 15 10 5 0 65 60 55 50 45 40 35 30 0 5 10 15 20 25 30 35 40 Next
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