**Question 3:**Suppose that the government was taxing consumers of widgets by $3 per unit. Now it repeals the tax on consumers and replaces it with a $3 per unit tax on producers. What will happen to the price of widgets?a. The price will rise by $3b. The price will rise, but by less than $3c. The price will be unchangedd. The price will fall, but by less than $3e. The price will fall by $3

Answered: #3. Suppose that the government was…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 3 The current price of a good is $25, and 100 units are demanded at that price. The price elasticity of demand for the good is-2. When the price of the good drops by 4 percent to $24, consumer surplus will increase or decrease? By how much?
Empirical evidence suggests that increases in the minimum wage do not result in reductions in employment among workers aged 25-54, but cause reduced employment for teenagers. This would suggest: A. the minimum wage is lower than the market-clearing wage for workers aged 25-54 B. the higher minimum wage causes a shift in supply for older age groups C. the minimum wage is lower than the market-clearing wage for teenagers
2
1. When price increases __________________ increases. 2.When price increases __________________decreases. 3. The height of the supply curve represents the ____________________ for each quantity. 4. The height of the demand curve represents the __________________ for each quantity. 5. What must be given up to produce one additional unit is called the..... Options: supply marginal value total cost quantity supplied quantity demanded marginal cost demand total value
N. If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to: A. rise and the equilibrium quantity to fall. B. rise and the equilibrium quantity to stay the same. C. rise and the equilibrium quantity to rise. D. stay the same and the equilibrium quantity to fall.
If the government imposes a price ceiling at $14, and the equilibrium price is at $10 in this market, the result would be a. A shortage b. A surplus c. A new equilibrium price d. Neither a surplus or a shortage
4) The supply curve of good A, and the supply curve if good B are both depicted in the following graph. Which statement is TRUE? Price 10- 9- 8 7 6 5 4- 3- 2 k 0 0 Supply A Supply B 100 200 300 400 500 600 700 800 900 1,000 Quantity Supply of good B is more elastic than the supply of good A. Supply of good A is unit elastic. Supply of good B is perfectly inelastic. Supply of good A is more elastic than the supply of good B.
The market for kaleburgers is given below. Price $10 Supply $9 $8 $7 $6 $5 $4 $3 $2 $1 Demand 200 400 600 800 1000 burgers/day Suppose the government imposes a $2 per burger tax on this market. a.) In response to the tax, the consumer price will rise to per burger. b.) In response to the tax, the price paid to producers will fall to per burger. c.) As a result of this tax, the quantity transacted will be burgers per day.
1. Calculate the price elasticity for each of the following. State whether price elasticity of demand is elastic, unit elastic, or inelastic. Will revenue rise, decline, or stay the same with the given change in price?
Lesson 10 Question 7
In a competitive market, if the government imposes a price ceiling below the equilibrium price, what is likely to happen?A. Surplus of goods B. Shortage of goods C. No change in quantity exchangedD. Price remains the same
Which government policy measure would reduce the price of a product and increase the quantity traded in the market? Pick a,b,c or d a. The setting of a maximum price b. The setting of a minimum price c. The imposition of a tax d. The granting of subsidy

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