The graph illustrates the supply and demand curves for sunflower seeds. The horizontal axis represents the quantity (in thousands), while the vertical axis indicates the price (in dollars). The blue line is the demand curve (D), showing the relationship between price and quantity demanded. The orange line is the supply curve (S), indicating the relationship between price and quantity supplied.Three horizontal black lines represent potential price floors at different levels:- The lowest line is at $4.- The middle line is at $5.- The top line is at $6.These price floors are potential government interventions to assist seed producers. The task is to determine which of these price floors would be the lowest binding price floor, which must be above the equilibrium price where the supply and demand curves intersect.The diagram includes an "A" label that can be positioned to indicate the selected price floor. There is also a legend indicating that letter "A" corresponds to the "lowest binding price floor," and a circular handle at each price level to potentially drag the label to mark the correct price floor. The equilibrium appears to be around $5, making the $5 line the lowest binding price floor, as it is just above equilibrium.

Price floor is the minimum price that must be paid to sellers. It is binding when it is set above…

Answered: The graph below shows the supply and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that a price floor of $320 has been implemented and there are no wasteful quality improvements. What are the total gains from trade (total surplus) with a price floor of $320? Hint: enter your answer as a number only with no $ sign Example: if the answer is $10,000, enter 10,000 2,400
Economics A competitive market with demandQ = 560 - 5P and supply P = 10 + Q is in equilibrium. If government imposes a price ceiling of 100, what quantity will be traded on the market? 60 70 80 85 100
18-19. In the competitive market for white sugar, consumer demand is given by P=100-0.050 and suppliers' behaviour is represented by the supply curve of P=1+0.005Q, where P is measured in dollars and Q is measured in kilos per month. Questions 17 through 19 refer to this market. 18. Imagine now that the government imposes a price ceiling of $5.00 per kilo on sugar, and that the ceiling is obeyed by all market participants. In the resulting equilibrium the total number of kilos of sugar exchanged in the market is equal to: A) 2100 G) 800 B) 2000 H) 600 A) $5 G) $70 C) 1900 I) 400 B) $10 H) $80 19. Suppose suppliers obey the price ceiling but consumers sell sugar on a black market. What will the black market price for sugar be? D) 1400 E) 1200 J) None of the above C) $10.50 I) $21 E) $50 F) 1000 D) $40 J) None of the above F) $60
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.
In Figure 1, suppose the marginal value for gasoline falls by $6 for every quantity demanded for all gas stations in the market. Next, assume that the government enacts a price ceiling of $2. What is the loss in consumer surplus? A) $6B) $2C) $12D) There is no consumer welfare loss because prices are lower.E) There is not enough information to calculate.
Market demand is P=125-(3/8)QMarket supply is P=5+(1/8)Q. This time the government imposes a price floor of $45. That is, the price must be either at or above $45.a. Calculate the new equilibrium price and quantity.b. Calculate the new CS (Consumer Surplus) and PS (Producer Surplus). Who gains? Who loses?What is the deadweight loss?
Subsidies lead to overproduction and overconsumption relative to the competitive equilibrium. What is the deadweight loss associated with this? Why is there a deadweight loss? Depict this in your original figure (see attached), or draw a new figure.
Price (dollars per pound) $21 18 15 13 11 0 40 $200 $100 $800 $60 80 Supply Demand Quantity (pounds) Figure 4-4 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18. What is the value of deadweight loss when the quantity is cut and the price rises to $18?
Demand: Qd= 2,600 - 5P Supply: Qs= 1000 + 10P What would be the amount of shortage if a price ceiling is imposed at $180?

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