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- Critique the following statement as True or False and explain your reasoning in 2-3 sentences. "Market failures are observed when government intervention prevents market forces from guiding marketstoward an equilibrium."When are government intervention or government regulations beneficial to consumers? when they impose regulations on businesses that limit profits when they limit consumer choices by regulating goods sold by private firms when they limit the number of businesses permitted to open and sell goods to consumers when they impose safety regulations that determine how bicycle helmets are manufacturedThe demand and supply of ethanol are given by QD = 8,000 – 2,000P and QS = 1,000P – 1,000, where P is price per gallon and Q measures gallons per minute. Suppose the government subsidizes ethanol at $0.30 a gallon that the producer pays. What does the subsidy cost the government? After the subsidy, what is the producer surplus? After the subsidy, what is the consumer surplus? After the subsidy, what is the deadweight loss?
- In an attempt to support beef farmers, the Japanese government raised the minimum price for beef in 2008. If the market equilibrium price was below the government’s minimum price, then the government’s minimum price is an example of a Binding price floor. Non-binding price floor. Binding price ceiling. Non-binding price ceiling. Classify the below scenarios as efficient, inefficient, or impossible: The Japanese government sets a minimum price for beef, resulting in a deviation from the market equilibrium. Canada and Japan specialize in the production of goods according to their comparative advantages and then trade. Canada’s overall production fell in 2020 due to widespread unemployment caused by the pandemic. ] The price of certain fresh fruits and vegetables in both Canada and Japan rose in March of last year as the pandemic made international trade in fresh fruits and vegetables difficult (assume no price controls).A2An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. (?) PRICE (Dollars per unit) QUANTITY (Units) Supply Demand ¦ þ Demand Supply
- Take a market that fulfills the supply and demand model assumptions. Inverse demand is P = 32-.75Q and inverse supply is P = 8+.25Q. Find the equilibrium price, quantity, consumer surplus, producer, and total surplus.Q7. THINK LIKE AN ECONOMIST Can you think of at least one good reason that perhaps government should not interfere in market shortages with price-gouging laws? Your response should be 100 words or less.The graph shows the private supply and demand curves for spaceships in Spacelandia. The craft are quite popular, but unfortunately produce pollutants as a by-product when Spacelandians fly about. Suppose the government of Spacelandia places a per unit tax on the production of spaceships equal to the marginal damage cost (MDC). Demonstrate the effect of the tax by shifting the appropriate curve or curves. Supply Demand Quantity Price
- Suppose a local government votes to impose an excise tax of $0.90 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 2100 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $2.00 and quantity of 1400 bottles per day. How much revenue from the tax does the local government collect each day?Please refer to the background information below to answer the following three questions. Consider the following supply and demand schedule of chocolate. Price ($ per unit) Quantity Demanded (units) Quantity Supplied (units) 295 95 120 40 45 270 245 50 55 60 145 170 195 220 195 65 70 170 220 145 245 75 120 95 270 295 80 85 70 320 90 45 20 345 95 370 33. Suppose initially the chocolate market is in an unregulated equilibrium. If the government imposes a tax of $10 for cach unit of the chocolate sold, the new equilibrium price paid by the consumers will be $[ Answer33 ]. 34. Given the above information, the government's tax revenue will be $[ Answer34 ]. 35. Suppose initially the chocolate market is in an unregulated equilibrium. If the government imposes a subsidy of $10 for each unit of the chocolate sold, the new equilibrium quantity would be [ Answer35 ] units.Which of the following best describes the idea of market efficiency? Group of answer choices A market is efficient when government determines the price of the good. A market is efficient when there is only one seller of the good. A market is efficient when total net gains (consumer surplus + producer surplus) are maximized. A market is efficient when consumers pay low prices.