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- 2. Draw a supply and demand curve and show the equilibrium price and quantity. Explain graphically in the same diagram what happens to the equilibrium price and quantity if there is an expectation of higher future prices of the product and there is an increase in taxation of the product in the economy?8 > Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $4.75. Michelle was willing to pay up to $6.75 for the cappuccino, and Paul's Cafe and Bakery was willing to accept $3.25 for the cappuccino. Based on this information, answer the questions. Michelle's consumer surplus: $ Paul's Cafe and Bakery's producer surplus: $ 755 18% 5/28 Prisc Insert Delete F10 F12 F3 Backspace 23 $4 8 6. 4 5 R U S G H. M CV INmacro question 6
- 16 12 8 5 сл 2 20 Reference: Ref 4-13 40 O C. $70 OD $210 60 D (Figure: Determining Surplus and Loss) Consider the graph. If the the government imposes a price floor of $12, calculate the total suplus. OA. $20 B. $2803. Use the graph and the inverse demand equation (P=50 - .5Q), inverse supply equation (P=0.333Q) with a subsidy of s=10 given to sellers instead of a tax. The inverse supply equation with the subsidy is (P = 0.333Q –s): a. Illustrate and calculate CS, PS and TS after the subsidy (TS after the subsidy – cost of subsidy) b. Explain what happens to CS, PS and TS with the subsidy. Did the subsidy result to DWL?Assume, the market price of milk is R.O 1.5 per liter. At this price, the buyers and sellers are able to buy and sell whatever they want. There is no shortage or surplus of milk in the market. From this context, analyze the statements given below and choose the correct statement. a. All of the options b. The price R.O 1.5 is the market clearing price of milk c. At the price R.O 1.5, the demand and supply of milk will be equal d. The price R.O 1.5 is the equilibrium price of milk
- Is the horizontal section of Country H's excess demand curve necessarily symmetric around zero? That is, are OH and HO of equal length in Fig. 7.3? Under what special circumstance are they of equal length? ( Hint: the answer has somethingto do with preferences.) I can't seem to upload two images, but figure 7.3 is simply an excess demand curve and it shows that the distance between 0 and H, which represents imports of X, is smaller than the distance between H' and 0 which represents exports. 6. Is the horizontal section of Country H's excess demand curve necessarily symmet ric around zero? That is, are OH and H'O of equal length in Fig. 7.3? Under what special circumstance are they of equal length? (Hint: the answer has something to do with preferences.)4. Figure: Commodity Tax 7 Po Q According to the figure, who bears the greater burden of a commodity tax in this market? A) The buyer will bear the greater burden of the tax. B) The seller will bear the greater burden of the tax. C) The buyer and the seller will split the tax burden equally. D) The government will bear the full burden of the tax.l Verizon 10:55 PM ncuone.ncu.edu Instructions Assume that the City Council in Prescott, Arizona is considering implementing price ceilings on rental units based on the number of bedrooms in the unit. The demand function for rental units (on a single bedroom equivalent basis) is given by Qp = 120 – 4P and the supply function is given by Qs = 2P, where P is price and Q is quantity. The Council is considering imposing a ceiling price on rental units of Pmax = 16. 1. Using the given functions, draw a corresponding demand curve and a supply curve. Properly label the equilibrium price and quantity. Then show what will happen to equilibrium if the City Council imposes a price ceiling at 16. NOTE: There are numerous guides online that demonstrate how to draw supply and demand curves; most are done in Excel. To create the demand curves that you need for this assignment, create an Excel file with a price column, including prices from $1 to $30. Using the formulas, compute the quantity demanded…
- 7. Taxation - An algebraic approach Suppose the supply of a good is given by the equation Q1,200P-1,200, and the demand for the good is given by the equation QD 2,400-400P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The government decides to levy an excise tax of $1.00 per unit on the good, to be paid by the seller. Calculate the value of each of the following, before the tax and after the tax, to complete the table that follows: 1. The equilibrium quantity produced 2. The equilibrium price consumers pay for the good 3. The price received by sellers Equilibrium Quantity (Millions of units) Equilibrium Price per Unit Paid by Consumers Price per Unit Received by Sellers Before Tax The government receives After Taxi Given the information you calculated in the preceding table, the tax incidence on consumers is on producers is per unit of the good: per unit of the good, and the tax incidence in tax revenue from levying an excise tax of…Suppose, in the graph below, there is a price ceiling of $5. Then there is a shortage of $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 0 3 units. 6 units. 1 unit. O 2 units. 1 2 3 4 5 6 7 ·00 8 9 S O, 10(Figure: Determining Surplus and Loss) In the graph, which price would NOT allow for a binding price ceiling? 16 12 60 O 52 O S6 O SI0 Question 22 (Figure: Quarts of Milk and Jars of Honey 2) If the price of milk rises, the budget line will 400 350 200 Budget 10 Jars of honey O pivot from its intersection with the horizontal axis to have a flatter slope O pivot from its intersection with the horizontal axis to have a steeper alope. O pivot from its intersection with the vertical axis to have a flatter slope O dhift outward in a parallel manner. Quarts of milk
