Suppose that the government sets a price floor for milk that is above the competitive equilibrium price.Identify the price and quantity sold when there is a price floor. Then show the change in economic surplus caused by theprice floor. (Note: If you have trouble graphing the triangle, be sure to drag the "Quantity sold" label out of your way sothat you can plot all three triangle points.)20-Supply18-16-1.) Use the point drawing tool to identify the quantity that is sold and the price with the price floor. Label the point"Quantity sold'.14-Price floor2.) Use the triangle drawing tool to shade the change in economic surplus as a result of the price floor. If there is anincrease in surplus, label it 'new economic surplus'; if there is a decrease in surplus, label it 'deadweight loss.12-10-Carefully follow the instructions above, and only draw the required objects.8-6-4-2-Demand12 16 20 24Quantity of milk28 32 36 40Clear AllChHelp Me Solve ThiseText PagesGet More Help -MacBook Proesc->G Search or type URL@#$246.8

With price floor set at 13 $, the economic surplus decreases as regulating free market will…

Answered: Suppose that the government sets a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain what would be likely to happen if the government placed a price floor on milk. Suppose that the price of milk is $4/gallon, and the government prohibits anyone from selling milk for less than $5/gallon. Your answer should consist of a complete well-written paragraph using complete sentences as well as a supply and demand diagram.
Q5 Last year the average price for an airline ticket was $400, but the average price dropped to $350 this year due to a decrease in the demand for flights. The accompanying table contains information on the supply of air travel. Airfare (price per ticket)Quantity supplied (millions of sales)$00$17535$35070$40080$575115$750150 Draw the supply curve and use it to calculate producer surplus last year and producer surplus this year. How did producer surplus change?
QUESTION 4 Suppose the demand curve is given by P = 216 - 2Q and the supply curve is given by P = 5Q. Suppose the supply curve shifts left by 20. How much lower is total surplus in the new equilibrium than in the old equilibrium? Give your answer to 2 decimal places.
12
The following graph plots the supply and demand curves in the market for polaroid cameras. Use the black point (plus symbol) to indicate the equilibrium price and quantity of polaroid cameras. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. 350 Demand 315 PRICE (Dollars per camera) 105 # # 3 * • 200 245 210 175 140 Supply 0 40 120 100 200 240 250 320 360 400 QUANTITY (Millions of cameras) Total surplus in this market is S million. + Equilibrium A Consumer Surplus Producer Surplus
Question 3 According to the following Figure, please answer a-f 12 D According to this graph, how much is the consumer surplus when price is set at equilibrium (P = $8)? (use the area of triangle: Base x Height x ½) According to this graph, how much is the producer surplus when price is equal to its equilibrium level (P=$8)? (use the area of triangle: Base x Height x ½) In the graph, how much is deadweight loss at a price of P =$8 (equilibrium)? Now, according to this graph, how much is the consumer surplus when price is set below the equilibrium level at P=$5? (Use the area of a triangle and the area of a rectangle, length x length) According to this graph, how much is the producer surplus when price is equal at P= $5? (use the area of triangle: Base x Height x ½) In the graph, how much is deadweight loss at a price of $5? (use the area of a triangle) In all cases please show your calculations so I know how to arrive at those numbers! hp
8. Consider the market for the Mona Lisa painting given by the following demand and supply curves: D: P = 1000-50QD and S: Qs=1 a. Draw the market for Mona Lisa paintings below. Label graph and axes. b. Calculate the equilibrium price and quantity of Mona Lisa paintings. Label P* and Q* on your graph from part a. C. Calculate consumer surplus and producer surplus. Label these (CS and PS) on your graph from part a. Suppose the French government imposed a $300 tax on buyers of Mona Lisa paintings. d. On the following graph, show the effect of the tax. Clearly label PBUYER PSELLER P, Q, QTAX CSTAX PSTAX, the tax revenue (TR), and DWL. (Here CSTAX PSTAX refer to consumer and producer surplus after the tax is imposed.) Calculate consumer surplus (CSTAX), producer surplus (PSTAX), deadweight loss (DWL), and the total tax revenue (TR) under the new tax. I e.
Use the accompanying graph to answer these questions. 20 S sº Price of X ($) 18 16 14 12 10 8 6 4 2 0 1 2 3 4 Quantity of Good X units 5 6 D a. Suppose demand is D and supply is SO. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price? Shortage: Full economic price: $ b. Suppose demand is D and supply is SO. If a price floor of $12 is imposed, what is the resulting surplus? What is the cost to the government of purchasing any and all unsold units? Surplus: Cost to government: $ c. Suppose demand is D and supply is so so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold? Fauilibrium price paid by consumers $1
The graph shows the market for game consoles. Suppose 1 million game consoles a year are being produced Draw the deadweight loss on game consoles. Suppose the quantity of game consoles produced is 1 million and the price is the equilibrium price Price (dollars per game console) 600- 500- 400- 300 300- Calculate the consumer surplus, producer surplus, and deadweight loss 200- The consumer surplus is $million 100- The producer surplus is $ million The deadweight loss is $million 3 Quantity (millions of game consoles per year) >>> Draw only the objects specified in the question
Macmilla As with any supply and demand diagram, the of diamond rings is labeled on the vertical axis, and the of diamond rings demanded and supplied is labeled on the horizontal axis. price; quantity quantity: price supply; demand demand; supply consumer surplus; producer surplus
Use the following information to answer Questions 1 - 3 In a competitive market for whole milk, the market demand is QD = 1000 – 50P and the market supply is QS = 150P, where Q denotes the quantity in gallons and P denotes the price in dollars. [1] Calculate the competitive market equilibrium price? [2] Calculate the competitive market equilibrium quantity? [3] At the competitive market equilibrium price and quantity, calculate the value for consumer surplus? Hint: it might be helpful to construct a graph.
In 2014, the U.S. House of Representatives approved a new farm bill establishing the Margin Protection Program (MPP) for dairy producers. Assume that the program has effectively created a price floor for milk at $0.18 per pound. Use the following additional information to answer the following questions: Without the price floor, the equilibrium price of milk is $0.15 per pound, and the equilibrium quantity is 200 billion pounds of milk. The supply curve intersects the price axis at $0.05 and the demand curve intersects the price axis at $0.25. At the price floor of $0.18, the quantity supplied is 260 billion, and the quantity demanded is 140 billion. To support the price floor, the USDA buys up the 120 billion pounds of excess milk. i. With the price floor at $0.18 per pound of milk, how much consumer surplus is created? Do not round your answer. ii. With the price floor at $0.18 per pound of milk, how much producer surplus is created? Do not round your answer. iii. With the price…

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