MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 13SQ
To determine
The impact of floor
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A). Draw the supply and demand curves for the market of specific good.
B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the
government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected
by that decision.
C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the
government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected
by that decision.
a. If a producer tries to sell oranges at a price of $0.50 per pound, what will be the quantity demanded and quantity supplied at this price?
b. Determine whether there is a surplus or a shortage at a price of $0.50 per pound, and determine the size of the surplus or shortage.
At this price, there will be a
This is the market for HOT CHOCOLATE, which is a normal good and is
produced with cocoa beans. We know that hot tea is a substitute for hot
chocolate and whipped cream is a complement.
Quantity
Surplus or
Price
Quantity Supplied
Demanded
Shortage
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000
1. Complete the table above finding a Shortage or a Surplus. Draw a graphical
illustration of the market and find the equilibrium price and equilibrium quantity.
For the remaining questions, explain by words or show graphically how
equilibrium price and equilibrium quantity of hot chocolate would change (due
to changes in Supply or Demand) if:
2. The price of cocoa beans falls;
3. The price of tea falls;
4. Consumer income falls because of a recession.
Chapter 4 Solutions
MACROECONOMICS FOR TODAY
Ch. 4.2 - Prob. 1YTECh. 4.2 - Prob. 2YTECh. 4.2 - Prob. 3YTECh. 4.2 - Prob. 4YTECh. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQP
Ch. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQPCh. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 16SQCh. 4 - Prob. 17SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQCh. 4 - Prob. 20SQ
Knowledge Booster
Similar questions
- Consider a market that is initially in equilibrium and the equilibrium price and quantity are P and Q respectively. Then, the government decides to impose a price ceiling at a price of Pc that is less than P. Which of the following statements is correct? 1. After the price ceiling is imposed, the quantity demanded is less than the quantity supplied on the market. 2. After the price ceiling is imposed, the quantity actually sold in the market is lower than it was before the price ceiling was imposed. 3. Producer surplus in the market increased after the price ceiling was imposed. 4. Since Pc is less than P, the price ceiling is effective and therefore, there is no deadweight loss in the market.arrow_forwardIn Figure 1, suppose the marginal value for gasoline falls by $6 for every quantity demanded for all gas stations in the market. After the changes, assume that the government enacts a price ceiling of $2. What will happen in the market? A) Quantity supplied will equal quantity demanded.B) There will be a surplus of 1 gallon.C) There will be a shortage of 3 gallons.D) There will be a surplus of 2 gallons.E) There will be a shortage of 4 gallons.arrow_forwardImagine that a dairy farmer is willing to provide milk to the market on the basis of the supply schedule shown in the table below. Supply of Milk Price (dollars per gallan) $6.09 5.58 5.08 4.58 Quantity of Milk Supplied (thousands of gallons) Pre-Subsidy Past Subaddy 17 Instructions: Round your answers to 2 decimal places Suppose the federal government proposes a subsidy for all milk produced that results in a 15% increase in the quantity supplied of milk at every price. 8. Fill in the "Post-Subsidy" column after the subsidy takes effect. b. At a market price of $5.00 per gallon, the pre-subsidy quantity supplied was after the subsidy is thousand gallons. thousand gallons and the quantity suppliedarrow_forward
- a) In the market for sugary drinks, the current equilibrium price is $10 and the equilibrium quantity is 30. The demand choke price is $50 and the supply choke price is $5 (a) Draw a demand and supply diagram, and shade the regions that represent consumer and producer welfare. Calculate the Total welfare in this market b) In this market, you now know that E D = −0.4 and E S = 1.2. Redraw your diagram in part (a) with the correct sloping curves. In this part you do not have to shade the welfare regions. All you need to do is redraw the diagram with the same equilibrium price and quantity, and choke prices but adjust the slope of each curve to reflect their respective elasticity c) If a tax was to be implemented in this market, what percentage of the burden is borne by the buyer? d) The government plans to discourage the consumption of sugary drinks and as such, they implemented a $1 tax on every bottle produced. In this situation, the suppliers are taxed directly but they hope to pass…arrow_forwardUse the graph below to answer the following questions: Price $15 Supply $14 $13 $12 $11 $10 Demand 25 75 125 175 225 275 Quantityarrow_forwardRefer to the graph below. A $6.95 B) $3.25 C) $4.45 D) $4.85 E $5.45 F) $4.95 PRICE Select the possible prices that buyers would pay if a $2 tax were added to this market. G) $6.85 5 3 Demand 60 100 QUANTITY Supplyarrow_forward
- 1. The market for pairs of sneakers is described by the following supply and demand curves: Qd = 350-P; Qs = 3P-50. a) Solve for the equilibrium price and quantity. b) If the government imposes a price ceiling of $90, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and the size of the shortage or surplus? c) If the government imposes a price floor of $90, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and the size of the shortage or surplus? d) Instead of a price control, the government levies a tax on produces of $20. As a result, the new supply curve is: Qs = 3(P-0)-50. Does a shortage or surplus (or neither) develop? What is the price the buyer pays, the price the seller receives, quantity supplied, quantity demanded, and the size of the shortage or surplus?arrow_forwardSuppose that the government imposed a price ceiling on cows. Would you expect theprice of steak to increase, decrease, or stay the same? Explain your answer.arrow_forwardSuppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further, suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.25 per fountain drink. Which of the following statements is correct? a. The price paid by buyers is $0.25 per drink more than it was before the tax. b. This tax causes the supply curve for fountain drinks to shift downward by $0.50 at each quantity. c. This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity. d. Forty percent of the burden of the tax falls on buyers.arrow_forward
- Consider a market where the equilibrium price for a good is $17 and the equilibrium quantity is 350 units. Assume that the quantity supplied at an above - equilibrium price is 5 times the equilibrium quantity, and the quantity demanded at the above - equilibrium price is 1/3 the equilibrium quantity. Calculate the surplus in the market at the above - equilibrium price. If necessary, round any intermediate calculations to one decimal place and your final answer to the nearest whole number.arrow_forwardWhen the quantity demanded of a goods is equal to the quantity supplied of the goods, then-___ what is the correct answer? Is it the government is intervening in the market? There is a surplus. There is a shortage. None of themarrow_forwardQ. Show and describe what would happen to the demand or quantity demanded or quantity supplied or supply for a good in each of the following cases: a) a. an increase in the price of a substitute of your product, an increase in the number of suppliers and an increase in subsidies I b) b. an increase in the price of a complement, an increase in input prices and increasing costs of regulation. c) c. an increase in income, for a normal good, Freezing weather wipes out wheat crops in Californiaarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning