Question 11 of 26 >O Macmillan LearningThe graphs show the market for bags of potato chips, whichis currently at an equilibrium price of $1.33 per bag and anequilibrium quantity of 5.33 million bags. Suppose that, in anattempt to lower blood pressure and reduce healthcare costs,the government imposes a $1.00 excise (or commodity) taxon potato chips.Suppose the government levies this tax on manufacturers foreach bag of potato chips they produce. Please shift theappropriate curve or curves to illustrate this.Price ($ per bag)5.04.54.03.53.02.0What is the price paid per bag by consumers (Pc) with thisnew tax?IncorrectAttempt 22.5Supply1.51.0100.5De0.0012345678 910Quantity (millions of bags)P = $2

In response to the imposition of the new tax on the producers, the supply will decrease and the…

Answered: Question 11 of 26 > O Macmillan…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Milan Italy is trying to control the price of face masks, and it isn't going well. On April 26 2020, Domenico Arcuri, special commissioner for the coronavirus emergency, announced that surgical face masks must be sold at a fixed price of 50 European cents plus tax. A good mask used to cost as little as 10 European cents, but prices surged after Covid-19. The Civil Protection Department, Italy's national body that deals with emergencies, promptly discouraged entrepreneurs from importing masks, right as more masks were needed. No one was allowed to import masks and sell them to the highest bidder. Now, there is a government set price and a shortage of masks and many pharmacists have stopped selling masks. Far from learning its lesson, the Italian government has suggested it will repeat its price-fixing mistakes by setting the price of N95 masks. The results won't be any better.
fl you know that Linda's consumption of potatoes fell from 200 pounds a year to 150 pounds a year when her income went up from $50,000 to $60,000 a year, you are able to calculate Linda's incomeelasticity of demand for potatoes. What is it? What do economists call this kind of a good?
Imagine that a dairy farmer is willing to provide milk to the market on the basis of the supply schedule shown in the table below. Supply of Milk Price (dollars per gallan) $6.09 5.58 5.08 4.58 Quantity of Milk Supplied (thousands of gallons) Pre-Subsidy Past Subaddy 17 Instructions: Round your answers to 2 decimal places Suppose the federal government proposes a subsidy for all milk produced that results in a 15% increase in the quantity supplied of milk at every price. 8. Fill in the "Post-Subsidy" column after the subsidy takes effect. b. At a market price of $5.00 per gallon, the pre-subsidy quantity supplied was after the subsidy is thousand gallons. thousand gallons and the quantity supplied
The price of SUVs, a substitute-in-production for sedans, has increased over the last year. Show the effect of this event on the market for sedans by shifting the appropriate curve in the graph shown. What is the new price? $ What is the new quantity? thousand million 50 45 Price($ thousand) 8 8 8 8 40 35 30 25 20 15 10 5 0 0 1 2 Market for Sedans 7 3 4 5 6 Quantity in millions of cars Supply 8 Demand 9 10
If the government provides a subsidy to the producers of coffee and simultaneously charges a tax on tea, which of the following can (but not necessarily wilI) happen in the market for coffee? * O The equilibrium price and quantity both decrease. O The equilibrium price increases and the equilibrium quantity decreases. O The equilibrium price stays the same and equilibrium quantity decreases. The equilibrium price stays the same and equilibrium quantity increases. O The equilibrium price decreases and the quantity stays the same. Income elasticity measures the responsiveness of changes in income to changes in price. changes in quantity demanded to a change in income. changes in quantity demanded to a change in price. changes in income to changes in supply. O All of the above.
8. U.S. government price supports for milk led to an unceasing surplus of milk. In an effort to reduce the surplus about a decade ago, Congress offered to pay dairy farmers to slaughter cows. Use two graphs, one for the milk market and one for the meat market, to illustrate how this policy should have affected the price of meat. (Assume that meat is sold in an unregulated market.) Be sure to draw the inverse demand and supply curves and label your axes. Explain clearly.
26
(Ref: Demand for Apples) The following figure is the demand for apples. 3 2 F I A 1 1 B 1 C D 1 T 1 1 I OB OF+G OE+F+G B+E 1 + 2 E Demand for Apples F G 3 Reference: (Ref: Demand for Apples) 4 H I 10 6 1 7 D (Re Demand for Apples) Suppose you are considering lower the price from $3 to $2. If you do this, which areas on the graph represent the QUANTITY EFFECT? 8
13. The table below gives part of the supply schedule for personal computers in the United States. Price Quantity Supplied before tech change Quantity Supplied after tech $1,100 $900 12,000 8,000 change 13,000 9,000 a) Calculate the price elasticity of supply when price rises from $900 to $1,100 using the arc elasticity formula (the midpoint method). b) Now suppose that technology changes such that at every price, 1000 more computers are supplied. Now, as prices rise from $900 to $1,100, is the elasticity of supply smaller than, larger than, or equal to the elasticity in part a)? c) Does the change in b) change the slope of the supply curve? Are slope and elasticity the same thing? Explain.
Let's assume that each person in the U.S consumes an average of 37 gallons of soft drinks(nondiet) at an average price of $2 per gallon and that the U.S population is 294 million. At a price of $1.50 per gallon, each individual demand schedule, Calculate the market demand schedule for soft drinks for the prices of $1.50and $2 per gallon.
USE TABLE #1: The supply curve intersects with the price axis at $_____. (Remember to use a comma, if a comma is needed and to include the decimal point and two numbers to the right of the decimal point).
Hand written solutions are strictly prohibited

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