(Figure: Determining Surplus and Loss) In the graph, a minimum price of $8 would allow for a binding price floor. 16 12 8. 20 40 60 True False
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- What is total surplus? How is it illustrated on a demand and supply diagram?Total economic surplus The following graph plots the supply and demand curves in the market for polaroid cameras. Total surplus in this market is _ million? *instructions on how to help* Use the Blackpoint (plus symbol) to indicate the equilibrium price and quantity of Polaroid cameras. then use the green point (triangle symbol) to fill the area, representing consumer surplus and use the purple point ( Diamond symbol) to fill the area of representing producer surplus. Answer then, what is the total surplus in this market.Consider a market where the equilibrium price for a good is $17 and the equilibrium quantity is 350 units. Assume that the quantity supplied at an above - equilibrium price is 5 times the equilibrium quantity, and the quantity demanded at the above - equilibrium price is 1/3 the equilibrium quantity. Calculate the surplus in the market at the above - equilibrium price. If necessary, round any intermediate calculations to one decimal place and your final answer to the nearest whole number.
- Suppose that the price of materials used to produce computer hardware, such as graphics cards, is decreased. Show what occurs to price, quantity, consumer surplus, producer surplus, and total surplus in the market for computers graphic cards using a supply-and-demand diagram (draw a graph). Furthermore, provide five explanations for what occurred.Consider the market for paper towels where the supply curve is upward sloping and the demand curve is downward sloping. (Hint: Draw the graphs to answer the questions below.) Suppose there is an effective price ceiling applied on this market. What happens to the consumer surplus as a result? 2. Suppose there is an effective price floor applied on this market. What happens to the consumer surplus as a result?Changes in Equilibrium Market for Hot Cocoa Scenario 1: Price Supply Studies have shown that consuming cocoa has health benefits. What effect would this have on the market for hot cocoa? (Indicate the effect by drawing on the graph provided) What has happened to the equilibrium price? Quantity? Demand Quantity Scenario 2: Market for Hot Cocoa Cocoa (Cacao) beans and imported from South America. The government has decided to increase the tax on imported goods such as cocoa. What effect would this have on the market for hot cocoa? (Indicate the effect by drawing on the graph provided) Price Supply What has happened to the equilibrium price? Quantity? Demand Quantity
- What does each part of the graph stand for? Assume that a local government imposes a price ceiling of $8, how many units will be excessively supplied/demanded?8. Consider the market for the Mona Lisa painting given by the following demand and supply curves: D: P = 1000-50QD and S: Qs=1 a. Draw the market for Mona Lisa paintings below. Label graph and axes. b. Calculate the equilibrium price and quantity of Mona Lisa paintings. Label P* and Q* on your graph from part a. C. Calculate consumer surplus and producer surplus. Label these (CS and PS) on your graph from part a. Suppose the French government imposed a $300 tax on buyers of Mona Lisa paintings. d. On the following graph, show the effect of the tax. Clearly label PBUYER PSELLER P, Q, QTAX CSTAX PSTAX, the tax revenue (TR), and DWL. (Here CSTAX PSTAX refer to consumer and producer surplus after the tax is imposed.) Calculate consumer surplus (CSTAX), producer surplus (PSTAX), deadweight loss (DWL), and the total tax revenue (TR) under the new tax. I e.The following diagram shows supply and demand in the market for tablets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of tablets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. PRICE (Dollars per tablet) 150 135 120 105 90 45 30 15 0 0 Demand Supply + 35 70 105 140 175 210 245 280 QUANTITY (Millions of tablets) Total surplus in this market is $ 315 350 million. Equilibrium Consumer Surplus Producer Surplus
- b) Suppose that the market price and the quantity traded are determined by supply and demand at equilibrium price. Now illustrate and explain very briefly by using a graph for what happens to the market equilibrium when technology improves and price of the substitute good increases at the same time (assuming both change by the same per cent) (You can answer the question by using only one graph) (15 points)Question 21 The graph below represents the market for lightbulbs. Calculate the surplus caused by the price floor. Pr = $7 Price (5) PE=$4.50 Market for Lightbulbs QD=2080 QE=6700 as 9080 Price Floor D QuantitySuppose that you decide to start a new business of making children’s ready-made garments. Make a (Hypothetical) linear supply schedule with 7 different price points and corresponding quantity supplied for your business. Make a graph showing equilibrium, shortage and surplus in the ready-made garments market. Give interpretation of this graph. Suppose cheap ready-made garments are imported from China. Draw a graph to show changes in equilibrium price and quantity for the Pakistani ready-made garments market. Give interpretation of this graph. Suppose that to boost the local industry, the Pakistani government gives subsidy on electricity prices. Draw a graph to show changes in equilibrium price and quantity. Give interpretation of this graph. Suppose that cheap cloth is imported from China for production of readymade garments and at the same time tourism in Pakistan increases bringing many more buyers of ready-made garments in the market. What will be impact on equilibrium price and…
