Need help with this. Thanks 6. Special-interest group effectThe following graph shows the market for paint.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly.PRICE (Dollars per gallon)12108005SupplyDemand15 30 45 60 75 90 105 120 135QUANTITY (Millions of gallons)Graph Input ToolPrice(Dollars per gallon)Quantity demanded(Millions of gallons)Surplus(Millions of gallons)2112Quantity supplied(Millions of gallons)Shortage(Millions of gallons)?2290 The market price of paint without government intervention isper gallon.Consider legislation that doesn't allow the price of paint to be below $9 per gallon and stipulates that the government buy any surplus paint produced atthat price. In order to raise the price to $9 per gallon, the government would need to buymillion gallons of paint, which would cost thegovernmentmillion.Suppose there are only a few paint producers who would benefit from this legislation and millions of consumers who would suffer through higher prices. Inthis case, legislation imposing price supports at $9 per gallon would mean which of the following?O The legislation will probably pass because its benefits are concentrated while its costs are widespread.O The legislation will be easily defeated because the increased price of paint would hurt millions of consumers, who would not reelect theirrepresentatives.O The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups.O The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough abouteconomics.

The price at which an asset can be sold on the open market is known as the market price. The price…

6. Special-interest group effect The following graph shows the market for paint. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 0 0 # I I Supply Demand + 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) 112 0 Quantity supplied (Millions of gallons) Shortage (Millions of gallons) (?) 22 90

6. Special-interest group effect The following graph shows the market for paint. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 0 0 # I I Supply Demand + 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) 112 0 Quantity supplied (Millions of gallons) Shortage (Millions of gallons) (?) 22 90

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

Need help with this. Thanks

6. Special-interest group effect
The following graph shows the market for paint.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly.
PRICE (Dollars per gallon)
12
10
8
0
0
5
Supply
Demand
15 30 45 60 75 90 105 120 135
QUANTITY (Millions of gallons)
Graph Input Tool
Price
(Dollars per gallon)
Quantity demanded
(Millions of gallons)
Surplus
(Millions of gallons)
2
112
Quantity supplied
(Millions of gallons)
Shortage
(Millions of gallons)
?
22
90

The market price of paint without government intervention is
per gallon.
Consider legislation that doesn't allow the price of paint to be below $9 per gallon and stipulates that the government buy any surplus paint produced at
that price. In order to raise the price to $9 per gallon, the government would need to buy
million gallons of paint, which would cost the
government
million.
Suppose there are only a few paint producers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In
this case, legislation imposing price supports at $9 per gallon would mean which of the following?
O The legislation will probably pass because its benefits are concentrated while its costs are widespread.
O The legislation will be easily defeated because the increased price of paint would hurt millions of consumers, who would not reelect their
representatives.
O The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups.
O The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough about
economics.

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