Use the accompanying graph to answer these questions. S¹ sº 20 Price of X ($) 18 16 14 12 10 8 6 4 2 0 Shortage: 1 2 3 Number of units sold: Quantity of Good X a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? Producer surplus: $ 4 O False Full economic price: $ b. Suppose demand is D and supply is so. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? True 5 Surplus: units Cost to government: $ c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $1 Price received by producers: $1 6 c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ D units d. Calculate the level of consumer and producer surplus when demand and supply are given by D and so respectively. Consumer surplus: $ e. Suppose demand is D and supply is SO. True or False: A price ceiling of $2 would be beneficial to consumers?
Use the accompanying graph to answer these questions. S¹ sº 20 Price of X ($) 18 16 14 12 10 8 6 4 2 0 Shortage: 1 2 3 Number of units sold: Quantity of Good X a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? Producer surplus: $ 4 O False Full economic price: $ b. Suppose demand is D and supply is so. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? True 5 Surplus: units Cost to government: $ c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $1 Price received by producers: $1 6 c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Equilibrium price paid by consumers: $ Price received by producers: $ D units d. Calculate the level of consumer and producer surplus when demand and supply are given by D and so respectively. Consumer surplus: $ e. Suppose demand is D and supply is SO. True or False: A price ceiling of $2 would be beneficial to consumers?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please solve part d and e....
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Transcribed Image Text:Use the accompanying graph to answer these questions.
S¹
sº
20
Price of X ($)
18
16
14
12
10
8
6
4
2
0
Shortage:
1
2
3
Number of units sold:
Quantity of Good X
a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are
the resulting shortage and full economic price?
Producer surplus: $
4
O False
Full economic price: $
b. Suppose demand is D and supply is so. If a price floor of $12 is imposed, what is the
resulting surplus? What is the cost to the government of purchasing any and all unsold
units?
True
5
Surplus:
units
Cost to government: $
c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax
of $6 is imposed on this product, what happens to the equilibrium price paid by
consumers? The price received by producers? The number of units sold?
Equilibrium price paid by consumers: $1
Price received by producers: $1
6
c. Suppose demand is D and supply is SO so that equilibrium price is $10. If an excise tax
of $6 is imposed on this product, what happens to the equilibrium price paid by
consumers? The price received by producers? The number of units sold?
Equilibrium price paid by consumers: $
Price received by producers: $
D
units
d. Calculate the level of consumer and producer surplus when demand and supply are
given by D and so respectively.
Consumer surplus: $
e. Suppose demand is D and supply is SO. True or False: A price ceiling of $2 would be
beneficial to consumers?
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