Suppose that the demand curve for wheat is and the supply curve is Q = 400-40p Consumer surplus Qs = 40p. The government provides producers with a specific subsidy of s= $2 per unit. How do the equilibrium price and quantity change? The equilibrium price decreases by $ 1 and the equilibrium quantity increases by $ 40 units. (Enter numeric responses using real numbers rounded to two decimal places.) What effect does this tax (subsidy) have on consumer surplus, producer surplus, government revenue, welfare, and deadweight loss? by $

Suppose that the demand curve for wheat is and the supply curve is Q = 400-40p Consumer surplus Qs = 40p. The government provides producers with a specific subsidy of s= $2 per unit. How do the equilibrium price and quantity change? The equilibrium price decreases by $ 1 and the equilibrium quantity increases by $ 40 units. (Enter numeric responses using real numbers rounded to two decimal places.) What effect does this tax (subsidy) have on consumer surplus, producer surplus, government revenue, welfare, and deadweight loss? by $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The government decides that the sugar price support program is getting too expensive. It abandons the support price program and instead assigns a marketing quota to each sugar producer. This quota gives the holder the right to sell sugar on the market and can be transferred to other producers. Altogether the quotas allocate to sugar growers add up to 9 million cwt. Please grab this problem, indicating clearly the market price and quantity. Not sure if this is necessary for the question but given is demand for sugar: Q= 20 - P Supply for sugar: Q = 2 + P quantities are in million hundredweight (cwt) and price is dollars per cwt. picture is of previous question that goes along to help answer with this one. I am needing help with number 3 that is pictured
Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home growers export 20 tons of wheat. Now suppose the Home government decides to support its domestic producers with an specific export subsidy of 40 US dollars per tonne. Use Figure 1 to answer the following questions: Figure 1: Supply and Demand for Wheat at Home Home price 140 100 X 10 20 40 50 Supply Demand Quantity (a) Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms.
The market demand function for corn is Q = 30 - 2P. The market supply function is QS = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss Before the tax Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax…
Suppose that a market is described by the following supply and demand equations: Supply Q = 3P; Demand Q = 400 - P. Suppose that a tax of $200 is placed on buyers. The deadweight loss of this tax is $15000 $30000 $200 $40000
Corn is a very valuable product for which the U.S. government routinely offers subsidies. With no price support, the equilibrium price for corn is $300 per ton and the equilibrium quantity is 500 million tons per year. Suppose that the government agrees to pay farmers $350 for every ton of corn they produce and can't sell in the market. According to the farmer's market supply curve, 600 million tons per year is supplied at the price of $350 a ton, so production should increase to this amount. However, domestic users of corn cut back their purchases. Only 450 million tons a year is demanded at the price of $350 a ton, and purchases decrease to this amount. Farmers continue to produce 500 million tons of corn per year, so because they produce a greater quantity of corn than domestic buyers are willing to purchase, something must be done with the surplus. To make the price support work, the government decides to buy the surplus. a. In this example, how many million tons does the…
Please explain
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.
Which of the following is true? Once the equilibrium price and output is reached, all the mutually beneficial trade opportunities between suppliers and demanders will have taken place, and the sum of consumer and producer surplus is maximized. The deadweight loss of a tax is the difference between the lost consumer and producer surplus and the tax revenue generated. Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so that the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve was more elastic. All of the above are true. Give the answer with proper explanation & Only typed Answer
The inverse supply function for coal is PS = 2 + QS. The inverse demand function for coal is PD = 20 - 2QD. By how much does consumer surplus increase when a $3 subsidy to consumption is introduced? (Assume that no tax was in place before the subsidy is introduced).
given the following information Qd=240 -5p and Qs= P Where Qd is the quantity demanded and Qs is the quantity supplied and P is the price. suppose the government decided to impose a tax of $12 per unit on the sellers in the market. Determine Demand and supply equation. Recheck consumer surplus calculation. Calculate Tax revenue, deadweight loss and total surplus after tax
Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qd. Suppose a tax of $3 per unit is placed on the good. What is the size of the deadweight loss? What fraction of the tax is paid by producers?
Refer to the figure entitled "Market for Cola". Suppose DO denotes the original demand curve and D1 denotes the demand curve after a per-unit tax is imposed on the buyers. What is the change in equilibrium price due to the tax? Price (per six pack) 10 1 4 10 Market for Cola D₂ 20 30 40 Quantity (# of six packs) Da 50 1) $1 2) $2 3) $3 4) $4 5) None of the above.