After it was named a "superfood", demand for kaleincreased dramatically (some sources say by 60%between 2007 and 2012). The entry of numerous newkale farmers into the industry has made the marketperfectly competitive. The Canadian government wouldlike to support kale farmers by offering one of fivepolicies/programs; the first 4 options (A thru D) would(directly or indirectly) lead to an equilibrium market priceof $2.25.• OptA: introduce a price minimum or price floorOption B: introduce a price supportOption C: introduce an incentive programOption D: introduce a payment in kind programAs a fifth alternative, the government could also directlygive farmers a monetary transfer that makes them just aswell off as if the market price were $2.25, but withoutactually impacting the price or quantity.Option E: make a direct monetary transfer to farmers.Market demand and supply for kale is described asQD = 2,000 – 500P and Qs800 + 100P.Calculate the benefits to kale farmers offered by each ofthe programs described above. Round your answer to thenearest cent, if necessary. Rank kale farmers' preferencefor the five options, from most preferred to leastpreferred.

The government ofter uses various schemes or policies to help the producers or suppliers. These…

After it was named a "superfood", demand for kale increased dramatically (some sources say by 60% between 2007 and 2012). The entry of numerous new kale farmers into the industry has made the market perfectly competitive. The Canadian government would like to support kale farmers by offering one of five policies/programs; the first 4 options (A thru D) would (directly or indirectly) lead to an equilibrium market price of $2.25. Option A: introduce a price minimum or price floor Option B: introduce a price support Option C: introduce an incentive program

After it was named a "superfood", demand for kale increased dramatically (some sources say by 60% between 2007 and 2012). The entry of numerous new kale farmers into the industry has made the market perfectly competitive. The Canadian government would like to support kale farmers by offering one of five policies/programs; the first 4 options (A thru D) would (directly or indirectly) lead to an equilibrium market price of $2.25. Option A: introduce a price minimum or price floor Option B: introduce a price support Option C: introduce an incentive program

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose the market for pizzas in the U.S. is perfectly competitive and is characterized by the following demand and supply equations (Q = quantity and P = Price): Demand for pizza: Qd = 100 – P Supply of pizza: Qs = 2P − 50 A) Find the market clearing equilibrium price P* and quantity Q*. B) Find the the consumer surplus and producer surplus at the equilibrium. C) Suppose that the U.S. imposes a price ceiling at $40. What is the quantity demanded by consumer (Qd’)? What is the quantity supplied by suppliers (Qs’)? D) Suppose that the U.S. imposes a price ceiling of $40. Is there a shortage or surplus for pizzas? E) Suppose that the U.S. imposes a price ceiling of $40. What is the new CS’ and PS’? Assuming that the government purchases/provides the surplus/shortage. Under the same assumption, what is the deadweight loss caused by the price floor?
Problem 6-3 Use a cell reference or a single formula where appropriate in order to receive full credit. Do not copy and paste values or type values, as you will not receive full credit for your answers. In a competitive market, the market demand curve is Q = 28 - 2p and the market supply curve is Os = -8 + 2p. Qa 28 -2 p -8 2 p a) Detemine the quantity demanded and quantity supplied for p = $4, 5, 6, .. , 14. b) For prices p = $4, 5, 6, ... , 14, determine the consumer surplus. c) For prices p = $4, 5, 6., 14, determine the producer surplus. а) b) c) Qa Qs CS PS $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 Determine the equilibrium quantity and price. The equilibrium quantity is and the equilibrium price is How does an increase in price affect the consumer surplus? When the price increases, the consumer surplus decreases increases How does an increase in price affect the producer surplus? When the price increases, the producer surplus d) Suppose the government limits the quantity traded in…
The current competitive market equilibrium price of an agricultural commodity is $3.50. Three-hundred (300) units of the commodity are sold at this price. The government has determined that price target of $4.00 would help to stabilize prices and ensure the long- run viability of the industry. At $4.00 producers would supply 400 units of the commodity. With 400 units supplied the government would need to provide a price support of $1.67 per unit. What is the value of the change in consumer surplus associated with the new policy? What is the value of the change in producer surplus associated with the new policy? .What is the net cost (or benefit) associated with the new policy?
Demand for apartments in town is D (x) =860 – 3x, and the supply is S (x) =500+9x, %3D where x is the number of apartments, in hundreds, and D (x) and S(x) are the rent in dollars per month, per apartment. The equilibrium point is (30, 770). Suppose a maximum rent of $644 per month is imposed by the town council. Find the deadweight loss. $ 1176 $ 1152 $ 16 $ 3072
Suppose that the cost of crude oil decreases from $25 to $20 for each barrel of heating oil produced. Assuming that the rest of the determinants of supply and demand for heating oil remain equal to their initial values, the market will eventually reach a new equilibrium price of per barrel.
At a price of $100 per office chair, 120 office chairs are demanded by consumers, but at a price of $110 per office chair, only 90 office chairs are demanded. The supplier is willing to supply x office chairs for a price, in dollars, of p(x) = 0.175x + 63.75. (a) What is the market equilibrium quantity of office chairs? office chairs (b) What is the market equilibrium price in dollars? $
Corn is a very valuable product for which the U.S. government routinely offers subsidies. With no price support, the equilibrium price for corn is $300 per ton and the equilibrium quantity is 500 million tons per year. Suppose that the government agrees to pay farmers $350 for every ton of corn they produce and can't sell in the market. According to the farmer's market supply curve, 600 million tons per year is supplied at the price of $350 a ton, so production should increase to this amount. However, domestic users of corn cut back their purchases. Only 450 million tons a year is demanded at the price of $350 a ton, and purchases decrease to this amount. Farmers continue to produce 500 million tons of corn per year, so because they produce a greater quantity of corn than domestic buyers are willing to purchase, something must be done with the surplus. To make the price support work, the government decides to buy the surplus. a. In this example, how many million tons does the…
The market for smart phone applications is characterized by the following demand and supply curves. QD = D(P) = 15 - 3P QS = S(P) = 5 + 10P (a) Calculate the equilibrium price and quantity for this market. (b) The government is considering introducing a per unit subsidy of t on each electric car that is purchased. Suppose that the statutory incidence of this subsidy will be on buyers. Using the equilibrium conditions, D(Pn - t) = S(Pn) = Q* (i.e. that demand equals supply in equilibrium), derive an equation in terms of es and ed that describes what fraction of the subsidy is borne by buyers/consumers. (c) Suppose that the unit tax is set at t = 0.1 per unit. What is the excess burden of this tax per dollar of revenue raised? (d) Suppose that we incorrectly assumed that supply was perfectly elastic and there was no impact of the tax on the equilibrium price received by sellers. Would EB/Tax Revenue be higher or lower than what you calculated in part (c)? In 4 sentences, explain your…
Part 2: Creation and/or diversion The U.S. demand for particulate air cleaners (all of which are produced abroad) is given by QD=580-8P. The U.S. can purchase cleaners from China and/or from Vietnam; consumers perceive the products from these two countries as identical. Vietnam is willing to supply cleaners to the U.S. according to the equation P=20+0.5Q", while China's export supply to the U.S. is given by P=20+0.25QC. a) Suppose the U.S. engages in free trade with both China and Vietnam. Compute the equilibrium price paid by U.S. consumers and the number of cleaners China and Vietnam will each sell to the U.S. Show your work. b) Repeat your analysis from part a), now for the case where the U.S. imposes a tariff of $10 on each imported cleaner. c) Repeat your analysis once again, now for the case where the U.S. imposes a $10 tariff on each cleaner imported from China, but engages in free trade with Vietnam.
Consider that the retail market for sanitizing wipes in a small locale is described by the follow demand and supply equations respectively: P = 8.40 - 0.02Q and P = 6.60 + 0.01Q where P is the price in dollars and Q is the quantity measured in thousands per week. The market is currently in equilibrium. (Question 8 of 8) Now consider than an unexpected viral outbreak led to consumers ensuring that much more surfaces (counter tops, door handles, etc.) are clean and sanitized. At the same time, the government's demand for sanitizing wipes at various public institutions (hospitals, schools, etc.) has impacted the supply of sanitizing wipes in the retail market. Although the government is neither a buyer nor seller in the retail market, their requests for sanitizing wipes does affect how many sanitizing wipes firms are able to supply in the retail market. The market for sanitizing wipes adjusts afterwards and the market is in equilibrium. Suppose that after the market for sanitizing wipes…
In the graph above, if the maximum price is set at P1, what area(s) represent the producer surplus after implementing this policy? Question 15 options: a) Areas C+D+G b) Area G c) Areas G+D d) Area C e) Area D
D1 D2 P2 P1-L Q1 Q2 Company X is a Georgia-based automobile manufacturer that produces a single model of car, the Destiny. Another company, Company Y, produces a car known as the Kismet that is widely viewed by the automobile industry as the Destiny's equal. Which of the following developments would MOST LIKELY lead to the changes illustrated on the graph in the market for the Destiny? a significant decline in the price of the Kismet a significant rise in the income levels of consumers interested in the Destiny