EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 7, Problem 8SPPA
To determine
To find:
The market price of the mushrooms, the
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QUESTION 4
Use the following supply and demand schedules for skate boards in table 18.1, to answer the questions
18(a). to 18(d) below.
Table 18.1
Price ($)
300
Quantity Demanded
Quantity Supplied
60
30
400
55
40
500
50
50
600
45
60
700
40
70
800
35
80
a. In response, to lobbying by the skate board association, the government places a
price ceiling at the price of $700 on skate boards. What will this have on the market
for skate boards? Explain your answer.
b. In response, to lobbying by the skate board association, the government places a
price ceiling of $400 on skate boards. Use the information provided in Table 18.1, to
plot the supply and demand curve for skate boards.
c. Use the information provided in Table 18.1, to plot the price ceiling of $400 on
skateboards.
d. What will be the result of a price ceiling of $400 on skate boards?
Macmillan Learning
Consider the following supply and demand diagram. In this market, the government subsidizes the production of this good, and
the subsidy wedge is indicated.
Price
$10
9
co
7
6
5
4
3
2
1
0
Demand
10 20 30 40 50
Supply
Subsidy
60 70 80 90
100
Quantity
a. Without the subsidy, what are the total gains from trade?
10. Calculate the deadweight loss caused by the subsidy in 8 and illustrate it in a graph.
11. Who benefits more from the subsidy, consumers or producers? Why?
Chapter 7 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 7 - Prob. 1SPPACh. 7 - Prob. 2SPPACh. 7 - Prob. 3SPPACh. 7 - Prob. 4SPPACh. 7 - Prob. 5SPPACh. 7 - Prob. 6SPPACh. 7 - Prob. 7SPPACh. 7 - Prob. 8SPPACh. 7 - Prob. 9SPPACh. 7 - Prob. 10SPPA
Ch. 7 - Prob. 11SPPACh. 7 - Prob. 1IAPACh. 7 - Prob. 2IAPACh. 7 - Prob. 3IAPACh. 7 - Prob. 4IAPACh. 7 - Prob. 5IAPACh. 7 - Prob. 6IAPACh. 7 - Prob. 7IAPACh. 7 - Prob. 8IAPACh. 7 - Prob. 9IAPACh. 7 - Prob. 1MCQCh. 7 - Prob. 2MCQCh. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQ
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