Identify the Surpluses. The graph to the right shows a supply curve and a demand curve and several areas in between. Identify the areas on the figure that represent the following: a. Consumer surplus in the market equilibrium: b. Producer surplus in the market equilibrium: c. Total surplus in the market equilibrium: d. Consumer surplus when the price is $6: e. Producer surplus when the price is $6: f. Total surplus when the price is $6: g. Consumer surplus when the quantity is 60: h. Producer surplus when the quantity is 60: i. Total surplus when the quantity is 60: Price Consumer and producer surplus 30- 28- 26- 24- 22- 20- 18 A 18- 16- 14- 12- B 10- D 6 4- °- 0 EL F CE Supply Demand -2 20 40 60 80 100 120 140 160 180 Quantity

Identify the Surpluses. The graph to the right shows a supply curve and a demand curve and several areas in between. Identify the areas on the figure that represent the following: a. Consumer surplus in the market equilibrium: b. Producer surplus in the market equilibrium: c. Total surplus in the market equilibrium: d. Consumer surplus when the price is $6: e. Producer surplus when the price is $6: f. Total surplus when the price is $6: g. Consumer surplus when the quantity is 60: h. Producer surplus when the quantity is 60: i. Total surplus when the quantity is 60: Price Consumer and producer surplus 30- 28- 26- 24- 22- 20- 18 A 18- 16- 14- 12- B 10- D 6 4- °- 0 EL F CE Supply Demand -2 20 40 60 80 100 120 140 160 180 Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 1: Market for Skis P 0 20 40 60 80 Qd 25 20 15 10 5 100 0 Qs 0 4 8 12 16 20
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.
Explain it correctly.
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. (screen shot 1) Suppose the government imposes an excise tax on mountain bikes. The black line on the following graph shows the tax wedge created by a tax of $80 per bike. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area…
Use the figure below to answer the following question. Price A B E LL F S St S K K Quantity D What area represents society's total surplus after the government imposes the excise tax on the market?
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The cookie demand curve slopes downward. When the price of cookies is $ 2, the quantity demanded is 100. If the price increases to $ 3, what happens to the consumer surplus?
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Above is the supply and demand graph in a market. Answer the following questions based on the graph: 3.1. What are the equilibrium price and quantity in the market? 3.2. What are the quantity supplied, quantity demanded, and price at a shortage of 400 units? 3.3. Whar are the quantity supplied, quantity demanded, and price at a surplus of 200 units?
1. Consider the market for cell phones in Celltown. Suppose that the inverse demand curve is P = -2Qd + 300 and that the inverse supply curve is P = 3Qs + 50. a. Sketch the inverse supply and inverse demand curves. b. Calculate the equilibrium price and quantity. c. Compute consumer surplus (CS), producer surplus (PS), and total surplus. d. Suppose the Mayor of Celltown institutes a price floor of P = $250 in order to promote the new technology. It is illegal to sell cell phones at a price below P. What is the quantity transacted in the market with the price floor? e. Compute the change in CS and the change in PS. f. Compute the change in total surplus. If you were an economic advisor to the Mayor whose goal is to maximize the total surplus of the city, would you advise continuing the policy or not? Explain. g. A representative of the Association of Cell Phone Manufacturers arrives at the Mayor's office to lobby against eliminating the price floor. i. Explain why economic theory…