1) The demand and supply conditions of market for beer are given by the followingequations:P=108 - Qd and P= Qs+18b.Calculate the consumer surplus and producer surplus for the equilibrium.c. Suppose that government impose a price floor at P-66 to control the consumption of beer.Is this policy effective? What are price and quantity consumed after this intervention ofgovernment?d. Going back to equilibrium in part a), suppose now that government restricts theproduction of the beer and set a quota of 20 in this market. What are price and quantityconsumed after this intervention of government?e. Going back to equilibrium in part a), suppose now that the government imposes a tax of$10 per unit on producers and the producers adjust the supply function to include the taxwhen t=10.Illustrate with a diagram how the producer tax of 10 will affect the market demand andsupply curves. Find the new equilibrium price and quantity after the tax. Show the initialand after tax equilibrium on your graph.f. Who gets the higher burden of the tax? Calculate the percentage tax share paid byconsumers and producers. Also, calculate the deadweight loss associated with the tax policy.g. Going back to equilibrium in part a), suppose now that this market is open to internationaltrade and international price of the beer is 36. Will this country export or import beer? Whatwill be the quantity of export/imports?h. Given the international price level in part g), suppose that government introduces a tariffof 12 per traded quantity. Calculate the new trade level and tariff revenue. Who will benefitfrom this policy?

Given: P=108-3/2Qd P=Qs+18 Note: Due to multiple subparts being posted, the first three subparts…

1) The demand and supply conditions of market for beer are given by the following equations: P=108 -Qd and P= Qs+18 b.Calculate the consumer surplus and producer surplus for the equilibrium. c. Suppose that government impose a price floor at P-66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d. Going back to equilibrium in part a), suppose now that government restricts the production of the beer and set a quota of 20 in this market. What are price and quantity consumed after this intervention of government?

1) The demand and supply conditions of market for beer are given by the following equations: P=108 -Qd and P= Qs+18 b.Calculate the consumer surplus and producer surplus for the equilibrium. c. Suppose that government impose a price floor at P-66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d. Going back to equilibrium in part a), suppose now that government restricts the production of the beer and set a quota of 20 in this market. What are price and quantity consumed after this intervention of government?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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