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Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 Supply Demand 0 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) The market price of milk without government intervention is $ Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) per gallon. 2 112 Quantity supplied (Millions of gallons) Shortage 0 (Millions of gallons) 22 90 Consider legislation that doesn't allow the price of milk to be below $9 per gallon and stipulates that the government buy any surplus milk produced at that price. In order to raise the price to $9 per gallon, the government would need to buy million gallons of milk, which would cost the government $ million. Suppose there are only a few dairy farmers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $9 per gallon would mean which of the following? The legislation will be easily defeated because the increased price of milk would hurt millions of consumers, who would not reelect their representatives. O The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups. O The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough about economics. di will

Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 Supply Demand 0 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) The market price of milk without government intervention is $ Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) per gallon. 2 112 Quantity supplied (Millions of gallons) Shortage 0 (Millions of gallons) 22 90 Consider legislation that doesn't allow the price of milk to be below $9 per gallon and stipulates that the government buy any surplus milk produced at that price. In order to raise the price to $9 per gallon, the government would need to buy million gallons of milk, which would cost the government $ million. Suppose there are only a few dairy farmers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $9 per gallon would mean which of the following? The legislation will be easily defeated because the increased price of milk would hurt millions of consumers, who would not reelect their representatives. O The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups. O The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough about economics. di will

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 8 2 + 0 0 Supply Demand 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) The market price of milk without government intervention is $ Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) per gallon. 112 0 Quantity supplied (Millions of gallons) Shortage (Millions of gallons) 22 90 Consider legislation that doesn't allow the price of milk to be below $9 per gallon and stipulates that the government buy any surplus milk produced at million gallons of milk, which would cost the that price. In order to raise the price to $9 per gallon, the government would need to buy government $ million. Suppose there are only a few dairy farmers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $9 per gallon would mean which of the following? The legislation will be easily defeated because the increased price of milk would hurt millions of consumers, who would not reelect their representatives. The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups. The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough about economics. The legislation will probably pass because its benefits are concentrated while its costs are widespread.
Transcribed Image Text:Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. PRICE (Dollars per gallon) 12 10 8 2 + 0 0 Supply Demand 15 30 45 60 75 90 105 120 135 QUANTITY (Millions of gallons) The market price of milk without government intervention is $ Graph Input Tool Price (Dollars per gallon) Quantity demanded (Millions of gallons) Surplus (Millions of gallons) per gallon. 112 0 Quantity supplied (Millions of gallons) Shortage (Millions of gallons) 22 90 Consider legislation that doesn't allow the price of milk to be below $9 per gallon and stipulates that the government buy any surplus milk produced at million gallons of milk, which would cost the that price. In order to raise the price to $9 per gallon, the government would need to buy government $ million. Suppose there are only a few dairy farmers who would benefit from this legislation and millions of consumers who would suffer through higher prices. In this case, legislation imposing price supports at $9 per gallon would mean which of the following? The legislation will be easily defeated because the increased price of milk would hurt millions of consumers, who would not reelect their representatives. The legislation may or may not pass since the benefits and costs of the legislation are concentrated among similarly sized groups. The legislation should pass because it is economically efficient, but it probably won't because consumers don't understand enough about economics. The legislation will probably pass because its benefits are concentrated while its costs are widespread.
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