QUESTION 3Why does a surplus exist under a binding price floor?a. It encourages buyers to purchase more of the product.b. It makes the price so high that the quantity supplied exceeds the quantity demanded in the legal market.c. It makes the price so low that the quantity demanded exceeds the quantity supplied on the legal market.d. It discourages sellers from increasing the quality of the product they sell, which, in turn, increases the quantitydemanded.e. It encourages sellers to produce less of the product0OO0

Price floor refers to the price that is set by the government above the equilibrium price. This is…

Answered: QUESTION 3 Why does a surplus exist…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When does a producer surplus occur? a. when individuals pay less than the maximum amount they would have been willing to pay for a good or service b. when producers sell a product for the exact minimum amount they would be willing to accept c. when producers sell a product for less than the minimum amount they would be willing to accept d. when producers sell a product for more than the minimum amount they would be willing to accept
1. Price 10 D, 10 15 Quantity The above graph shows a market with a tax imposed on consumers of a good. (a) On the graph, shade or label the region equal to the deadweight loss of the tax. Calculate the size of the deadweight loss. (b) On the graph, shade or label the region equal to the tax revenue from the tax. Calculate the size of the tax revenue.
. Which statement best explains how a price ceiling affects the market for gasoline? It can cause more gasoline producers to enter the market. It can lead to producers increasing their production costs for gasoline. It can cause shortages in the supply of gasoline. It can lead to a decrease in the demand from consumers for gasoline.
1. The market price is $________ per bottle.2. The equilibrium quantity is ________ bottles.3. The price at which suppliers will not put any bottles on the market is $_______.4. What is the consumers’ surplus in the market at equilibrium $________ (assume the demand curve starts at $38)5. What is the producers’ surplus in this market at equilibrium $_______
Table C Buyer Willingness to Pay (Dollars ) Kevin 25 Sasha 30 Erica 35 Chen 45 Refer to Table C. If the price is $27, then consumer surplus in the market is $55, and Erica and Chen purchase the good. $ 90, and Kevin and Sasha purchase the good. $29, and Sasha, Erica, and Chen purchase the good. $60, and Kevin, Sasha, Erica, and Chen purchase the good.
To economists, the term "consumer surplus" means: Select one: a. the difference between the price a consumer is willing to pay and the price that suppliers are willing to accept. b. the excess money consumers have left over after purchasing goods. c. the consumer's net benefit from trading. d. the difference between the price a consumer is able to pay and willing to pay.
First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags 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. PRICE (Dollars per handbag) 500 450 400 Demand 350 300 250 200 Before Tax Supply 150 100 50 0 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) + Equilibrium Consumer Surplus Producer Surplus ?
FIGURE 6-1 A P1 B. P2 P3 F D. Q2 Quantity Refer to Figure 6-1. What area identifies the consumer surplus created when the market price equals P2? area A area C+ D + F area B + E area A+ B+E Price
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Ryan would be willing to pay $1 for a lollipop. Sarah would be willing to pay $0.50. The price of the lollipop is $0.75. What is Ryan and Sarah's combined consumer surplus? a. $0 b. $0.25 c. $0.50 d. $0.75 Can someone please explain to me why the correct answer here is $0.25? I did the calculations and i keep getting $0 the follwing is my calculations
6 a)Draw a demand and supply schedule showing that a good will not be produced or sold? b) Draw a demand and supply schedule and show the deadweight loss of banning a good that buyers are willing to pay a price greater than the minimum supply price. c) What does it mean to say there is an “affordable” housing shortage?
Consumer Willingness to Pay Curly Moe Larry $50 30 15 The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of one of the bottles is $27 dollars, total consumer surplus will be A. $0. B. $14. C. $26. O D. $53.

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