PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172357
Author: OpenStax
Publisher: OpenStax
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Chapter 3, Problem 50CTQ
Explain why voluntary Martians improve social welfare.
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Doug William, the owner of a corner store, estimates that the supply and demand for a specialized energy drinkcould be described by the following equations D : q=−25 p+345 , S : q=50 p−330,where p represents the price in dollars per case (each case contains 12 bottles), and q represents the number ofcases sold each week
(a) Determine the market equilibrium price and quantity.
The annual demand for imported oranges is given by the following equation:QD = 600,000 − 30,000Pwhere P is the price per kilogram and QD is quantity of kilograms demanded per year.The supply of imported oranges is given by the equation:QS = 20,000P
Calculate the following: ii. the amount of revenues collected
The market demand for productXis given by: \[ Q_{d}=6-1 / 2 P \text { or } P d=12-2 Q \] The market supply for goodXis given by: \[ Q_{s}=-14+2 P \text { or } P s=7+1 / 2 Q \] whereP=price per unit andQis number of units. Draw a supply-and-demand graph with these curves. 1.) Using the line drawing tool, draw the supply and demand curves. Properly label your lines. 2.) Using the point drawing tool, plot the equilibrium point. Label your point 'E'. Note: Carefully follow the instructions above and only draw the required objects. The equilibrium price is$and the equilibrium quantity is unit(s). (Enter your responses as integers.) A per-unit excise tax is imposed on suppliers of productX, and the market supply with the tax is now given by: \[ Q_{s}=-19+2 P \text { or } P s=9.50+1 / 2 Q \] Using the graph on the right, show this supply curve. 1.) Using the line drawing tool, draw the new supply curve. Label your line 'S1+tax'.1. Note: Carefully follow the instructions above and only draw…
Chapter 3 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 3 - Review Figure 3.4. Suppose the price of gasoline...Ch. 3 - Why do economists use the ceteris paribus...Ch. 3 - In an analysis of the market for paint, an...Ch. 3 - Many changes are affecting the market for oil....Ch. 3 - Lets think about the market for air travel. From...Ch. 3 - A tariff is a tax on imported goods. Suppose the...Ch. 3 - What is the effect of a price ceiling on the...Ch. 3 - Does a price ceiling change the equilibrium price?Ch. 3 - What would be the impact of imposing a price flour...Ch. 3 - Does a price ceiling increase the decrease the...
Ch. 3 - If a price floor benefits producers, why does a...Ch. 3 - What determines the level of prices in a market?Ch. 3 - What does a downward-sloping demand curve mean...Ch. 3 - Will demand curves have the same exact shape in...Ch. 3 - Will supply curves have the same shape in all...Ch. 3 - What is the relationship between quantity Demanded...Ch. 3 - How can you locate the equilibrium point on a...Ch. 3 - If the price is above line equilibrium level,...Ch. 3 - When the price is above the equilibrium, explain...Ch. 3 - What is the difference between the demand and the...Ch. 3 - What is the difference between the supply and the...Ch. 3 - When analyzing a market, how do economists deal...Ch. 3 - Name some factors that can cause a shift in line...Ch. 3 - Name some farm that can cause a shift in the...Ch. 3 - How does one analyze a market where both demand...Ch. 3 - What causes a movement along the demand curve?...Ch. 3 - Does a price ceiling attempt to make a price...Ch. 3 - How does a price ceiling set below the equilibrium...Ch. 3 - Does a price floor attempt to make a price higher...Ch. 3 - How does a price floor 521 above the equilibrium...Ch. 3 - What is consumer surplus? How is it illustrated on...Ch. 3 - What is producer surplus? How is it illustrated on...Ch. 3 - What is total surplus? How is it illustrated on a...Ch. 3 - What is the relationship between total surplus and...Ch. 3 - What is deadweight loss?Ch. 3 - Review Figure 3.4. Suppose the government decided...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Consider the demand for hamburgers. If the price...Ch. 3 - How do you suppose the demographics of an aging...Ch. 3 - We know that a change in the price of a product...Ch. 3 - Suppose there is a soda tax to curb obesity. What...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Suppose both of these events took place at the...Ch. 3 - Must government policy decisions have winners and...Ch. 3 - Agricultural price supports result in governments...Ch. 3 - Can you propose a policy that meld induce the...Ch. 3 - What term would an economist use to describe what...Ch. 3 - Explain why voluntary Martians improve social...Ch. 3 - Why would a free market mar operate at a quantity...Ch. 3 - Review Figure 3.4 again. Suppose the price of...Ch. 3 - Table 3.8 shows information on the demand and...Ch. 3 - The computer market in recent years has seen many...Ch. 3 - Table 3.9 illustrates the markets demand and...Ch. 3 - Table 3.10 shows the supply and demand for movie...Ch. 3 - A low-income county decides to set a price ceiling...
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- Why is it importat to determine the determinants of supply?arrow_forwardin decamber,the price of christmas trees rises and the quantity of trees sold also rises.is this a violatin of the law of demandarrow_forwardSuppose 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…arrow_forward
- Typed plzzzz And Asaparrow_forward3. Determinants of demand The following graph shows the demand curve for sedans (for example, Toyota Camrys or Honda Accords) in New York City. For simplicity, assume that all sedans are identical and sell for the same price. Initially, the graph shows market demand under the following circumstances: Average household income is $50,000 per year, the price of a gallon of gas is $4.00 per gallon. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Demand for Sedans Demand for Sedans 40 I Price of a sedan 15 (Thousand of dollars) Quantity Demanded 563 (Sedans per month) Demand Shifters Average Income (Thousands of dollars) 50 Demand 10 Price of Gas 4 (Dollars per gallon) 100 200 300 400 500 600 700 800 900 QUANTITY (Sedans per month) PRICE (Thousands of dollars per…arrow_forwardSuppose thne supply and deman in the figure below. Answer the following questions. curves for gas are shöwn A Hat BIG to 5 Quantity (1,0005 gailns)arrow_forward
- What is the "Price Elasticity of Demand" and what is its role in Microeconomics?arrow_forwardwhat are the determinants of the produce surplusin a market ?how does it increse depend on the determination ?arrow_forwardNo written by hand solution Suppose the current price of gasoline at the pump is $4 per gallon and that 1 million gallons are sold per day. A politician proposes to add a $1 tax to the price of a gallon of gasoline. She says that the tax will generate $1 million in tax revenues per day. Explain the assumption that she is making.arrow_forward
- Let's assume that each person in the U.S consumes an average of 37 gallons of soft drinks(nondiet) at an average price of $2 per gallon and that the U.S population is 294 million. At a price of $1.50 per gallon, each individual demand schedule, Calculate the market demand schedule for soft drinks for the prices of $1.50and $2 per gallon.arrow_forwardThe greater the positive cross elasticity coefficient between products "x" and "y": O a The closer the substitutability of "x" and y" Ob The less sensitive the sales of "x" are given a change in the price of "y" OC The more sensitive the sales of each product are to an increase in income Od The closer "X and "y" are as complementary goods.arrow_forwardAssume that a retailer sells 1000 six packs of Pepsi per day at at $3./6pk. You, as an economic analysis , estimate that the cross price elastcity between pepsi and coca cola is 0.4. If the retailer raises the price of coca cola by 10%, how would sales of pepsi be affected, ceteris paribus, whyarrow_forward
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