The following TWO questions refer to the supply and demand curves illustrated below. Price P2 P3 Quantity 1. A price ceiling of P3 causes: a) A deadweight loss triangle whose comers are ABC. b) A deadweight loss triangle whose corners are ACD. c) A deadweight loss triangle whose comers are BEC. d) A dcadweight loss triangle whose comers are CDE. 2. A price floor of PI causes: a) Excess demand equal to the distance AB. b) Excess supply equal to the distance AB. c) Excess supply equal to the distance DE d) Excess demand equal to the distance DE. 3. Which of the following statements about price ceilings is TRUE? a) Price ceilings make sellers worse off. b) Price ceilings make buyers better off. c) Both a) and b) are true. d) Neither a) nor b is true). 4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers better off and others worse off. b) Minimum wage laws make employers worse off. c) Both a) and b) are truc. d) None of the above are true.

The following TWO questions refer to the supply and demand curves illustrated below. Price P2 P3 Quantity 1. A price ceiling of P3 causes: a) A deadweight loss triangle whose comers are ABC. b) A deadweight loss triangle whose corners are ACD. c) A deadweight loss triangle whose comers are BEC. d) A dcadweight loss triangle whose comers are CDE. 2. A price floor of PI causes: a) Excess demand equal to the distance AB. b) Excess supply equal to the distance AB. c) Excess supply equal to the distance DE d) Excess demand equal to the distance DE. 3. Which of the following statements about price ceilings is TRUE? a) Price ceilings make sellers worse off. b) Price ceilings make buyers better off. c) Both a) and b) are true. d) Neither a) nor b is true). 4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers better off and others worse off. b) Minimum wage laws make employers worse off. c) Both a) and b) are truc. d) None of the above are true.

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 Organization for the Promotion of Brussels Sprouts has convinced the government of Ironia to institute a price floor on the sale of Brussels sprouts at $8 per bushel. Demand is given by:P = 9 – Qand supply by:P = 2Q,where Q is measured in thousands of bushels.Instructions: Round your answers to the nearest whole number.a. At market equilibrium, the price is $ per bushel and the equilibrium quantity is thousand bushels.b. With the price floor, the price is $ per bushel and the quantity sold is thousand bushels.c. The excess quantity supplied of Brussels sprouts produced with the price floor is thousand bushels.
Waterfront homes have an inelastic supply and electric scooters have an elastic supply. Suppose that arise in population doubles the demand for both products. a) Graph the scenario for waterfront homes.Graph the scenario for electric scooters. See attached documents for graphs. What happens to theequilibrium price and quantity in each market? Response: In each of these cases the equilibrium prices goup, quantity in the scooters goes up, and the waterfront homes quantity does not change. b) Whichproduct experiences a larger change in price? Waterfront homes Why? There is an abundance in thedemand at the initial price so then this increases the price of waterfront homes. Explain the role ofelasticity in the change. c) Which product experiences a larger change in quantity? Electric ScootersWhy? Electric Scooters are an inelastic product. Explain the role of elasticity in the change. d) Whathappens to total consumer spending on each product? As the price and quantity goes up for…
The following equations represent the annual quantity demanded (Qd) and quantity supplied (Qs) for tickets for Danubiana Museum of Modern Art in Bratislava, Slovakia. Qd = 50,000-1,000P Qs = 10,000+3,000P, where P is the price of a ticket in euros. a) Suppose that there is a price floor of 7 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes, how large will it be? b) Suppose that there is a price ceiling of 7 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes, how large will it be? c) Suppose that there is a price ceiling of 20 euros per museum ticket in Slovakia. Will there be a surplus or a shortage in the market for tickets for Danubiana Museum of Modern Art? If yes,…
Question 1 Figure 4-9 Panel (a) P₁ P ↑price ↑ T D quantity O placing a tax on cigarettes an increase in the price of cigarettes Panel (b) ↑price T D' Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (b), the arrows are consistent with which of the following events? D the prohibition of cigarette advertisements on television decreasing the price of marijuana, given that tobacco and marijuana are complements quantity
Price of Gasoline P3 P₂ P₁ 0 9₂ 9₂ 52 D S₁ Price Ceiling Quantity of Gasoline Refer to the figure above. With a price ceiling present in this market, what will happen when the supply curve for gasoline shifts from S₁ to S₂? The market price will stay at P₁ due to the price ceiling. A shortage will occur at the price ceiling of P2. The price will increase to P3. A surplus will occur at the new market price of P₂.
No written by hand solution Suppose that Sam and Teresa are the only consumers of dance classes in a particular market. The following table shows their annual demand schedules: Price Sam's Quantity Demanded Teresa's Quantity Demanded (Dollars per class) (Classes) (Classes) 10 32 56 20 20 40 30 12 24 40 4 12 50 0 4 On the following graph, plot Sam's demand for dance classes using the green points (triangle symbol). Next, plot Teresa's demand for dance classes using the purple points (diamond symbol). Finally, plot the market demand for
Below, you are provided with the demand and supply schedules for jars of peanut butter. You will use this information to analyze the effect of a price ceiling on the price of a jar of peanut butter, and to identify whether the price ceiling leads to a shortage or a surplus of peanut butter. Price Jars of Peanut Butter Demanded Jars of Peanut Butter Supplied $2.00 2,500 1,000 $2.50 2,250 1,250 $3.00 2,000 1,500 $3.50 1,750 1,750 $4.00 1,500 2,000 Part 10 : Complete the statement below. When a price ceiling is imposed…
Assume the following demand and supply curves Qd=95-5P Qs=-40+10P Compute the price and quantity i the government was to impose a price ceiling of P=$6 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b с d P=9, Qs=50, Qd=50 P=6, Qs=50, Qd=50 P=6, Qs=20, Qd=65 P=5, Qs=10, Qd=70
Suppose that the market for bottled water can be represented by the following equations: Demand: P = 10 - 2QDSupply: P = 1 + 0.5QSwhere P is the price per gallon, and Q represents quantity of purified water, represented inmillions of gallons of water consumed.a) Calculate the equilibrium price and quantity of bottled water.b) Concerned over high water prices after the winter storm, the government sets a priceceiling of $2.25 per gallon of water. What is the new quantity of water sold in themarket? Use supply and demand curves to illustrate your answer, showing both theoriginal equilibrium from part a) and the new quantity sold with the price ceiling.c) Calculate the producer surplus and consumer surplus at the initial equilibrium priceand quantity from part a).d) Calculate the new producer surplus and consumer surplus with the price ceiling frompart b).e) How does the total consumer and producer surplus in part c) compare to the totalconsumer and producer surplus in part d)? What…
Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as shown below: Suppose government establishes a price ceiling of $3.70 for wheat. What might prompt it to establish this price ceiling? Explain carefully the main effects. Demonstrate your answer graphically.
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.
Refer to the figure entitled "Market for Meds". If a price ceiling is imposed at $4, what will be the change in consumer surplus? Price (in $) 10 8 2 0 0 10 Market for Meds 20 30 Quantity 40 So Do 50 1) Consumer surplus will fall by 2.5. 2) Consumer surplus will increase by 2.5. 3) Consumer surplus will decrease by 17.5. 4) Consumer surplus will increase by 17.5. 5) None of the above. 60