Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants without causing the world price to rise. Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? billion (Enter a numeric response using a real number rounded to two decimal places using the correct sign) Price of ethanol (per gallon) 2.80 2.00 2.40 2.00 1.80 1.00- 1.40- 1.20 1.004 0.80 0.00 0.40 0.20 0.00 Quantity of ethanol Supply
Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants without causing the world price to rise. Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? billion (Enter a numeric response using a real number rounded to two decimal places using the correct sign) Price of ethanol (per gallon) 2.80 2.00 2.40 2.00 1.80 1.00- 1.40- 1.20 1.004 0.80 0.00 0.40 0.20 0.00 Quantity of ethanol Supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Ab 46
Economics
Transcribed Image Text:Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world
price of ethanol is $1.00 per gallon, and at that price the United States can buy as much ethanol as it wants
without causing the world price to rise.
Now suppose a quota eliminating trade is imposed by the government.
What is the dollar amount of the change in consumer surplus as a result of the quota?
a numeric response using a real number rounded to two decimal places using the correct sign)
billion. (Enter
Price of ethanol (per gallon)
2.80
2.60
2.40-
2.20-
2.00-
1.80
1.60
1.40
1.20
1.00-
0.80-
0.60-
0.40
0.20
0.00+
Supply
Demand
Quantity of ethanol (billion gallons per year)
GOO
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