Suppose that the demand and supply functions for good x are given as follows: O 120 - 2P, +I + Pand Q =-30+ P - 2t + s - 2f where P, denotes the price of good x. P denotes the price of a related%3Dproduct y, I denotes income, t denotes tax firms face, s denotes subsidy and f denotes factorprices.What happens to the demand and supply ofx as subsidy to firms (s) rises?Both supply and demand shift to the right.Supply shifts to the left while demand stays the same.No change in Demand and Supply.Supply shifts to the right while demand stays the same.

Correct: Supply shifts to the right while demand stays the same.

Answered: Suppose that the demand and supply…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Problem 3. Given that the farm gate price of product x is PHP 15.00/kg, Q1 is 350 kg and Q2 is 300 kg; a) what will be the tax revenue if buyer's price (with tax) is 20% higher than the the farm gate price? b) what is the value of the deadweight loss? Price PB Ps 0 *********** B В D Supply Demand Q2 Q₁ Quantity
Q. 30 Consider the following model where S is subsidy given to consumers by the government. Y = C+I+G C=a+bY* Y =Y +S-tY I =I +aY G=G+S+tY Where a 10 0.5 20 0.05 100 100 0.1 Equilibrium output is equal to: А. 200 В. 400 C. 450 D. 600 Е. none of the above
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Suppose that the demand and supply functions for good x are given as follows: Q=120-2P, +I+P, and Q=-30+ P₁ - 2r+s-2/ where P, denotes the price of good x, P, denotes the price of a related product y, I denotes income, t denotes tax firms face, s denotes subsidy and f denotes factor prices. What happens to the price and quantity equilibrium of good x as Income falls? Price equilibrium falls while quantity equilibrium rises. Both equilibrium price and quantity fall. Price equilibrium rises while quantity equilibrium falls. Both equilibrium price and quantity rise.
For years the government has subsidized higher education through grants; consider the demand and supply for college credit hours at a local private liberal arts collegeQD = 6,000 – 300PQS = 700P – 500 where P is the price, in hundreds of dollars, and Q is the number of credit hours per semester. Suppose the government subsidizes credit hours at a rate of $120 per hour. Calculate changes in consumer surplus. What is the size of the deadweight loss?
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Next, consider an example of DWL in the labour market. Suppose the demand for labour is given by the fixed gross wage W = $16. The supply is given by W = 0.8L. (a) Illustrate the market geometrically. (b) Calculate the equilibrium amount of labour supplied, and the supplier surplus. (c) Suppose a wage tax that reduces the wage to W = $12 is imposed. By how much is the supplier’s surplus reduced at the new equilibrium?
where QD denotes the quantity demanded and p the price. The gold curve for apples is given by QO (p) = 3/2 p, where QO denotes the quantity o§ert. SC denotes the consumer surplus at market equilibrium in the absence of government intervention. Suppose the government imposes a ceiling price p = 30 on apples. We denote by SC the consumer surplus at market equilibrium with price ceiling. Calculate SC - SC *.
Suppose that a market is described by the following supply and demand equations: Q³ = 2P QD=300-P A tax of T is place on buyers, so the new demand equation is QD = 300 - (P+T). The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the deadweight loss? T²/3 2T/3 2*(300-T)/3 (300-T)/3
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