MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Chapter 8, Problem 20PAA
To determine
To analyze U.S. steel market and effect on price change.
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Suppose that President Clinton has recently recommended that the U.S. should use some of the strategic oil reserves (oil stored underground and owned by the United States government) in order to solve the U.S. oil supply problem. Assume that quantity demanded in the short-run is inelastic at 1 million barrels per day. The quantity supplied (per day) is equal to 700,000 + 10,000P (where P is the price for a barrel of oil).
a. What would be the current price for a barrel of oil? N
b. If Clinton releases 100,000 barrels per day, what is the new equilibrium price and quantity? N
c. Presidential candidate George W. Bush proposed that all states lower their gasoline tax. Assume that the gasoline tax reduction leads to a $10 decrease in the tax on a barrel of oil (i.e., supply side). What is the new price and quantity? N How much of the tax savings will be passed on to consumer through lower prices? Assume that the changes in part b. have not occurred.
d. What impact do each of these two…
Suppose that President Clinton has recently recommended that the U.S. should use some of the strategic oil reserves (oil stored underground and owned by the United States government) in order to solve the U.S. oil supply problem. Assume that quantity demanded in the short-run is inelastic at 1 million barrels per day. The quantity supplied (per day) is equal to 700,000 + 10,000P (where P is the price for a barrel of oil).
a. What would be the current price for a barrel of oil? N
b. If Clinton releases 100,000 barrels per day, what is the new equilibrium price and quantity? N
c. Presidential candidate George W. Bush proposed that all states lower their gasoline tax. Assume that the gasoline tax reduction leads to a $10 decrease in the tax on a barrel of oil (i.e., supply side). What is the new price and quantity? N How much of the tax savings will be passed on to consumer through lower prices? Assume that the changes in part b. have not occurred.
d. What impact do each of these two…
S
S
p'
p*
D
Y*
X' X*
→数量
M
The supply function and demand function of a
certain agricultural product are as follows: S=2p-
40, D=-2p+120. p is the unit price. Let's assume
that the home country is a small country. The
international price of the product is P*=25. The
government then decides to impose restrictions on
the import quantity of this product and the limited
amount is ='-' (see the graph). In an open economy
situation, when M=40, please answer questions
15-18.15. Please calculate the consumer surplus of
this country. 16. Please calculate the producer
surplus of this country. 17. Please calculate the
total surplus of this country. 18. Please calculate
the deadweight loss of this country.
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