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Discuss and graphically explain how government intervention affects the economic surplus and efficiency
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- The banana industry was a market failure in St. Vincent and the Grenadines. (i) What type of market failure is it? (ii) Which government policy would yield the efficient outcome andchow does the process through which the implementation of the governmentpolicy lead to the optimal outcome. (iii) How does the imposition of the chosen government policy impactconsumer surplus, producer surplus and total surplus in this scenario?Explain the efficiency implications of a selective tax on a commodity, using the consumer surplus approach and a diagram as part of your answer. Use a constant-cost, i.e., horizontal, supply curve.Identify a market failure in Trinidad and Tobago, identify the type of market failure and discuss why market failure occured. Identify a market failure in Trinidad and Tobago, identify the type of market failure and discuss why market failure occured. Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. Carefully explain how the imposition of the chosen government policy impact consumer surplus, producer surplus and total surplus in this scenario.
- Suppose that the direct demand and direct supply functions are x = √200 - p and x = √p-38, respectively (where x is quantity and p is price). Solve for the equilibrium price and quantity. Using integral, determine the consumer, producer and social surplus.NoneFor this question, suppose the market for widgets is perfectly competitive and the government introduces a per-unit $1 tax on widgets. Post-tax, quantity of widgets sold in market equals 100. Which of the following is true? A. Reduction in producer surplus due to imposition of tax definitely equals 100 B. Reduction in producer surplus due to imposition of tax certainly equals 100 when the tax is collected from producers, but not when it is collected from consumers. C. Reduction in consumer surplus is definitely smaller than 100. D. Tax revenue is more than 100. E. None of the above.
- Use the following to answer questions 14-17. Suppose the government imposes a tax of 6 (t = 6) %3D on suppliers for each unit of sunflower they sell in the market. 14. After taxation, what is the new price that consumers actually pay for sunflower? what is the new quantity demanded for sunflower? 15. What is the new price that suppliers actually receive after taxation? 16. What is the new consumer surplus, new producer surplus, and new government revenue after taxation (in values)?44. In a perfectly competitive market for a good with a downward sloping demand curve and an upward sloping supply curve, the marginal social benefit is greater than the marginal social cost at the market equilibrium quantity. The government imposition of a new per-unit tax on the production of the good would (A) have no effect on the price of the good (B) increase consumer surplus () increase the deadweight loss (D) increase producer surplus (E) increase the quantity sold of the goodSolve part d and e
- Some economists think that gas taxes in Europe, averaging around $2.50 per gallon, are too high from the perspective of economic efficiency. Suppose that this is true, and that social welfare could be increased with slightly lower gas taxes. Present a welfare analysis graph of the gasoline market in Europe with a gas tax that is too high. Identify five areas in your graph: 1. Consumer surplus 2. Producer surplus 3. Externality damage 4. Tax revenues 5. The potential welfare gain if taxes were lowered to the "correct" level.a tax of $10 per ton of coal causes the price, inclusive of the tax, to increase from $60 per ton to $63 perton, and the quantity to decrease from 540 million tons to 500 million tons. what is the loss of consumer surplus? Producer surplus?The graph shows the relevant curves in the paper production market Social MC In the absence of government intervention, how many reams of paper are purchased or sold? Specify your answer to two decimal places Supply or private MC 13.37- 10.2 рарer: reams Demand What is the efficient amount of paper this market should produce? Specify your answer to two decimal places. 0 19.34 5.14 10.64 13.84 Quantity (reams) раper: reams Compared to the socially optimal level of production, is too much or too little paper produced in this market? too little too much Price (S)
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