4. These are the supply and demand schedules for good X:QuantitySuppliedQuantityDemandedPrice$101839.1648.147126.6.10758.8.46.34102211112a) What is the equilibrium price and quantity? At this equilibrium, what is the producer's revenue?(Note: Producer's Revenue = Price * Quantity Sold)b) If the government sets a price of $8 for X, what will be the price, quantity, and revenue? Will therebe a shortage or surplus of X?c) If the government sets a price of $3, answer the same questions as in b).d) Suppose the demand for X increases, so that at each price, consumers want to buy three more unitsof the good. What happens to price, quantity, and revenue? Why has the quantity sold not increasedby three units?

NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Answered: 4. These are the supply and demand…

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 46 46. Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10% by volume), and that ethanol manufactured in the U.S. is made from corn, what will happen if the government eliminates the price support for corn? a) Demand for ethanol will increase. b) Demand for ethanol will decrease. c) Supply of ethanol will increase. d) Supply of ethanol will decrease. e) Both (a) and (c)
Use the accompanying graph to answer these questions. 20 S sº Price of X ($) 18 16 14 12 10 8 6 4 2 0 1 2 3 4 Quantity of Good X units 5 6 D a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? Shortage: Full economic price: $ b. Suppose demand is D and supply is SO. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? Surplus: Cost to government: $ c. Suppose demand is D and supply is so so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Fauilibrium price paid by consumers $1
Price per litre ($) Quantity Demanded in 000 Quantity Supplied in 000 litres (per Month) litres (per month) 11 . 0 27 10 2 25 9 4 23 8 6 20 7 8 17 6 10 15 5 12 12 4 14 10 3 16 7 2 18 5 1 3 3 Construct the demand and supply curves for gasoline to show the market equilibrium for gasoline. Given a new government policy in Microland, Gasoline producers have started to obtain subsidies from the government. Construct a NEW diagram to show the impact of the subsidy on the market equilibrium. Explain the effect of the subsidy on the market forces and the equilibrium point. Describe THREE (3) other changes that could have the same effect on market supply of gasoline as the imposition of the subsidy in (B) above. Nb. Please answer question number 4.
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
2. In Application Question 5 of Chapter 3, we examined the market for DVDs where the supply and demand curves are given by Q = 3P and Q = 60-2P, respectively. Refer to the following diagram. $ 59 30 50 S Price 12 0 36 Quantity 60 (a) If the government imposes a price ceiling of $5 in this market, what will happen to the positions of the demand and supply curves? (b) Calculate the consumer surplus at the equilibrium price. (c) Calculate the producer surplus at the equilibrium price. Now suppose that a $6 per unit maximum price is imposed in this market. The diagram shows the impact on quantity demanded and quantity supplied. (d) Calculate the consumer surplus. (Careful!) (e) Calculate the producer surplus. (f) Calculate the deadweight loss.
1. The government imposes a price floor in the market for peanuts in order to stabilize or raise farmer's incomes. a) what would happen to the quantity demanded and the quantity supplied of peanuts? b) would a shortage or surplus results? Show the shortage or surplus in your graph. c)would the amount of market exchange increase or decrease or remain the same? Explain carefully.
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1. The demand and supply functions of beans are respectively given as 20QB +15PB-5PR=6000 and 10QB-15PB=1200. Similarly, the demand and supply of rice are Qr+Pr-PB=250 and 3Qr-7PR=710. Pɛ and PR are prices of beans and rice. QB is demand of beans and Qr is demand of rice. Find the equilibrium price and quantity of beans and rice. Are rice and beans substitute? Explain your answer.
3. The figure to the right illustrates the market for apples in which the government has imposed a price floor of $13 per crate. 20- 18- How many crates of apples will be sold after the price floor has been imposed? per year. (Enter your response as an integer.) 16- million crates of apples Supply 14- Will there be a shortage or surplus? If there is a shortage or surplus, how large will it be? 12- 10- There will be a (1). million crates of apples per year. (Enter your response as an integer.) 8- of 6- 4- Will apple producers benefit from the price floor? 24 Demand OA Apple producers who are able to sell their apples at the $13 price per crate will beneft. O B. Appie producers who are not able to sell their apples will not benefit. OC. Total revenue for apple producers as a group will decrease from $220 million to $208 million. 8 12 16 20 24 28 32 36 40 Quantity (millions of crates per year) 4. O D. Both a and b. OE All of the above (1) O nhortage O surplus Price
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
Identify the scenario which corresponds to the graph of a given market below: $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $- 20 40 60 80 100 120 140 160 Quantity The graph represents a decrease in supply and a decrease in equilibrium price and quantity. The graph represents a decrease in demand and a decrease in equilibrium price and quantity. The graph represents a decrease in equilibrium quantity demanded because of a price increase. The graph represents an increase in demand and a decrease in equilibrium price and quantity. Price

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