3. The graph below represents the market for flank steak in a specific town. Calculate the value of consumer surplus, producer surplus, economic surplus, and deadweight loss under two different scenarios: a) when the market price is allowed to prevail b) when the town passes a law setting a price ceiling for flank steak of $13 per pound Price (dollars per pound) $21 18 15 13 11 O 40 48 Supply Demand Quantity (pounds)

3. The graph below represents the market for flank steak in a specific town. Calculate the value of consumer surplus, producer surplus, economic surplus, and deadweight loss under two different scenarios: a) when the market price is allowed to prevail b) when the town passes a law setting a price ceiling for flank steak of $13 per pound Price (dollars per pound) $21 18 15 13 11 O 40 48 Supply Demand Quantity (pounds)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7 If the supply curve remains unchanged and the demand curve shifts left price increases; quantity increases price increases, decreases, or remains unchanged; quantity decreases price decreases; quantity increases, decreases, or remains unchanged price decreases; quantity decreases
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7. What would be the impact in this market, of a price ceiling set at $13 a) A market surplus of 7 b) A market surplus of 10 c) A market surplus of 21 d) There would be no impact e) A market shortage of 7 f) A market shortage of 10 g) A market shortage of 21 8. What would be the impact in this market, of a price ceiling set at $16 a) A market surplus of 7 b) A market surplus of 10 c) A market surplus of 21 d) There would be no impact e) A market shortage of 7 f) A market shortage of 10 g) A market shortage of 21
Currently the price for wheat is $5 per bushel. To help the farmers, the government promises that it will buy any wheat that farmers can't sell at a price of $6 per bushel. Select one. O a This will decrease producer surplus. O b This is an example of quota. O c This will decrease consumer surplus. O d This is an example of price ceiling
Refer to the graph to the right. After the government imposes a price of $3.50 in this market, area A represents O A. total economic surplus. O B. the producer surplus transferred to consumers. OC. the consumer surplus transferred to producers. O D. a deadweight loss. $3.50 A 3.00 2.0 Quantity (billions of bushels per year) 2.2 1.8 Price (dollars per bushel) D.
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Figure 9-1 Price $50 10 10 15 O 5 units US Supply O 15 units O 10 units O 20 units World price Quantity of leather footwear Figure 9-1 shows the U.S. demand and supply for leather footwear. US Demand Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity demanded?
If the market price reduces from $7 to $5 what is the gain in consumer surplus? Price $20 $7 $5 O 480 850 425 O 1725 O 200 200 230 Quantity
3.30 3.00 Supply 2.70 2.40 2.10 Demand 1.80 1.50 1.20 0.90 0.60 0.30 50 100 150 200 250 300 350 400 Suppose that a price ceiling is set at $2.70. Which of the following is true? O a. There will be a shortage of 200 units Ob. There will be an excess supply of 100 units Oc. There will be a excess supply of 200 units Od. The ceiling is non-binding
10 If the supply curve shifts right and the demand curve remains unchanged price increases; quantity increases price decreases; quantity increases price increases; quantity increases, decreases or is unchanged price increases; quantity decreases
What is meant by deadweight loss? Why does a price ceiling usually result in a deadweight loss? Deadweight loss is at OA. net loss in output; below OB. net loss of social surplus; below O C. net loss in output; above O D. net loss of social surplus; above A price ceiling results in a deadweight loss when the ceiling price is set the market clearing price.
P[ 25 (Price dollars per 20 unit) 12 6 2 12 28 20 (Quantity: Thousand Units sold per week) Answer the following 3 questions according to information here and graph in this question: Graph shows that a competitive market creates an efficient allocation of resources at equilibrium. Which of the following pairs are equilibrium price and equilibrium quantity respectively? ($ sign means dollars) 12 $ and 12,000 units O 20 $ and 4 units O 25 $ and 28,000 units O 25 $ and 28 units O 12 $ and 28 units