Foundations of Economics (8th Edition)
Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 7, Problem 8SPPA
To determine

To find:

The market price of the mushrooms, the producer surplus and deadweight loss, the people who will be benefitted and who will be not.

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QUESTION 4 Use the following supply and demand schedules for skate boards in table 18.1, to answer the questions 18(a). to 18(d) below. Table 18.1 Price ($) 300 Quantity Demanded Quantity Supplied 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response, to lobbying by the skate board association, the government places a price ceiling at the price of $700 on skate boards. What will this have on the market for skate boards? Explain your answer. b. In response, to lobbying by the skate board association, the government places a price ceiling of $400 on skate boards. Use the information provided in Table 18.1, to plot the supply and demand curve for skate boards. c. Use the information provided in Table 18.1, to plot the price ceiling of $400 on skateboards. d. What will be the result of a price ceiling of $400 on skate boards?
Macmillan Learning Consider the following supply and demand diagram. In this market, the government subsidizes the production of this good, and the subsidy wedge is indicated. Price $10 9 co 7 6 5 4 3 2 1 0 Demand 10 20 30 40 50 Supply Subsidy 60 70 80 90 100 Quantity a. Without the subsidy, what are the total gains from trade?
10. Calculate the deadweight loss caused by the subsidy in 8 and illustrate it in a graph. 11. Who benefits more from the subsidy, consumers or producers? Why?
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