Question 1

Suppose the demand and supply curves for shampoo are given by Q^D = 18 - 5P Q^S = -3 + 2P where Q^D is the quantity of shampoo demanded (in thousands of bottles), Q^S is the quantity supplied, and P is the price of shampoo (in dollars per bottle). a. Calculate the equilibrium price and quantity. b. Calculate the consumer surplus at the equilibrium price.

Accepted Answer

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Question 2

The demand curve for pizza on the college campus is represented by Q^D = 1,000 - 40P. At a price of $14, the total consumer surplus for the college campus would be $_____.

Accepted Answer

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Question 3

The supply curve for pizza on the local college campus is represented by Q^S = -2,500 + 210P. At a price of $14, the total producer surplus for the college campus would be $_____.

Accepted Answer

The answer of The supply curve for pizza on the...

Question 4

The supply and demand for squash are given by Q^D = 200,000 - 50,000P and Q^S = 90,000P - 80,000, where P is price per pound and Q measures pounds of squash. a. What is the level of consumer surplus at the equilibrium price? b. What is the level of producer surplus at the equilibrium price?

Accepted Answer

The answer of The supply and demand for squash are...

Question 5

Explain why taxes cause deadweight losses.

Accepted Answer

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Question 6

The supply and demand for almonds are Q^D = 80 - 10P and Q^S = 10P, where P is price per bag and Q measures hundreds of bags per day. a. What are the equilibrium price and quantity? b. Calculate consumer and producer surplus. c. Suppose the government imposes a price floor of $7 per bag. Is there a shortage or surplus of almonds? If so, what size is it? d. Calculate consumer and producer surplus with the price floor. e. What is the size of the deadweight loss?

Accepted Answer

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Question 7

The supply and demand for organic peanut butter are Q^D = 70 - 5P and Q^S = 5P, where P is price per jar and Q is in hundreds of jars per day. The government decides to impose either a $1 supply subsidy or a price floor equal to $7.50. The producer surplus associated with the price floor would be _____.

Accepted Answer

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Question 8

The supply and demand for solar panels are given by Q^S = 5P - 5,000 and Q^D = 15,000 - 5P, where P is price per solar panel and Q measures the quantity of solar panels. Suppose the government provides a $500 subsidy per solar panel. a. Calculate the price consumers pay before and after the subsidy. b. Calculate the price producers receive before and after the subsidy. c. How much does the subsidy program cost the government?

Accepted Answer

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Question 9

Answer the following questions regarding taxes. a. Suppose the demand for insulin pumps is Q^D = 2,000 and the supply of insulin pumps is Q^S = 0.5P - 1,000. What is the price that sellers receive per pump? Suppose the government imposes a tax of $400 per pump on sellers. What after-tax price per pump do sellers receive? b. In the market for organic fruit, the elasticity of supply is 0.75 and the elasticity of demand is -1.25. If there is a tax of $2 per unit on organic fruit, what share of the tax is paid by buyers and what share is paid by sellers?

Accepted Answer

The answer of Answer the following questions regarding taxes.
a. Suppose...

Question 10

Many states have minimum price laws for cigarettes. Assume that the demand equation for cigarettes is Q^D = 4,000 - 300P, while the supply equation is Q^S = -1,000 + 200P, with quantity in thousands of packs. Assume that state governments replace the $12 price floors with a tax of $5 per pack, resulting in the same number of packs sold as under the price floor. The price floor would lead to a deadweight loss of $_____; the $5 tax would lead to a deadweight loss of $_____.

Accepted Answer

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Question 11

Suppose that a local government has imposed a quota of 0.5 million gallons on water usage. Before the quota is enforced, the market demand curve is given by Q^D = 10 - 2.25P and the market supply curve is given by Q^S = -10 + 2.75P where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. a. How will the quota influence the market price of water? The quantity of water sold? b. Calculate the deadweight loss resulting from the quota.

Accepted Answer

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Question 12

Suppose the demand and supply curves for shampoo are given by Q^D = 18 - 5P Q^S = -3 + 2P where Q^D is the quantity of shampoo demanded (in thousands of bottles), Q^S is the quantity supplied, and P is the price of shampoo (in dollars per bottle). Calculate producer surplus at the equilibrium price using calculus.

Accepted Answer

The answer of Suppose the demand and supply curves for...

Question 13

Suppose the demand and supply curves for units of university credits are given by Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price charged for each unit in dollars. Suppose that the government wants to make education more accessible and, therefore, passes a regulation that says no university can charge more than $1,000 per credit. Calculate the deadweight loss associated with this price ceiling.

Accepted Answer

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Question 14

The supply and demand for 9-volt batteries are given by Q^D = 230 - 10P and Q^S = 30P - 10, where P is the price per four-pack and Q measures the number of four-packs. a. What are the levels of consumer and producer surplus at the equilibrium price? b. Suppose that a hurricane causes widespread blackouts, shifting the demand curve for 9-volt batteries outward, with the new demand curve equal to Q^D = 690 - 10P. If the government sets a price ceiling equal to the pre-hurricane price (the old equilibrium price), what is the level of consumer surplus? c. If the government did not impose the price ceiling, what would consumer surplus equal? Are consumers better off with the price ceiling?

Accepted Answer

The answer of The supply and demand for 9-volt batteries...

Question 15

Many U.S. states have minimum price laws for cigarettes. Assume that the demand equation for cigarettes is Q^D = 4,000 - 300P and the supply equation is Q^S = -1,000 + 200P, with quantity in thousands of packs. The number of cigarette packs actually sold when a binding price floor of $12 is applied to this market will be _____.

Accepted Answer

The answer of Many U.S. states have minimum price laws...

Question 16

(Figure: Market for Boxes I) Suppose the government sets a price ceiling of $10.  
a. What are the values of consumer surplus before and after the price change?
b. What are the values of producer surplus before and after the price change?
c. What is the value of the deadweight loss?

Accepted Answer

The answer of (Figure: Market for Boxes I) Suppose the...

Question 17

In the market for cotton, the quantity demanded and quantity supplied are expressed mathematically as Q^D = 400 - 250P and Q^S = 250P - 100, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $0.50 per pound of cotton. a. How big is the shortage resulting from the price ceiling? b. What is the level of consumer surplus with the price ceiling? c. What is the level of producer surplus with the price ceiling? d. What is the value of the deadweight loss associated with the price ceiling?

Accepted Answer

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Question 18

(Figure: Health Care Visits I) In Figure: Health Care Visits I, S_priv represents the supply of health care visits at private clinics and S_total represents the total supply of health care visits at private and government-operated clinics. a. How many health care visits are provided by government-operated clinics? b. Without government-operated clinics, how many health care visits are provided by the private sector? c. With government-operated clinics, how many health care visits are provided by the private sector? d. Does the presence of government-operated clinics cause crowding out? Explain.

Accepted Answer

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Question 19

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is Q^D = 6 - 0.5P. Supply is given as Q^S = P. The deadweight loss due to a quota of two sticks is $_____.

Accepted Answer

The answer of Assume that the demand for selfie sticks...

Question 20

Suppose the demand and supply curves for units of university credits are given by Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

Accepted Answer

The answer of Suppose the demand and supply curves for...

Quiz 3: Using Supply and Demand to Analyze Markets

The demand curve for pizza on the college campus is represented by QD = 1,000 - 40P. At a price of $14, the total consumer surplus for the college campus would be $_____.

The supply curve for pizza on the local college campus is represented by QS = -2,500 + 210P. At a price of $14, the total producer surplus for the college campus would be $_____.

The supply and demand for squash are given by QD = 200,000 - 50,000P and QS = 90,000P - 80,000, where P is price per pound and Q measures pounds of squash. a. What is the level of consumer surplus at the equilibrium price? b. What is the level of producer surplus at the equilibrium price?

Explain why taxes cause deadweight losses.

(Figure: Market for Boxes I) Suppose the government sets a price ceiling of $10. a. What are the values of consumer surplus before and after the price change? b. What are the values of producer surplus before and after the price change? c. What is the value of the deadweight loss?

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is QD = 6 - 0.5P. Supply is given as QS = P. The deadweight loss due to a quota of two sticks is $_____.

Suppose the demand and supply curves for units of university credits are given by QD = 5,000 - P QS = -1,000 + 4P where QD is the quantity of credits demanded, QS is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

The demand curve for pizza on the college campus is represented by Q^D = 1,000 - 40P. At a price of $14, the total consumer surplus for the college campus would be $_____.

The supply curve for pizza on the local college campus is represented by Q^S = -2,500 + 210P. At a price of $14, the total producer surplus for the college campus would be $_____.

The supply and demand for squash are given by Q^D = 200,000 - 50,000P and Q^S = 90,000P - 80,000, where P is price per pound and Q measures pounds of squash. a. What is the level of consumer surplus at the equilibrium price? b. What is the level of producer surplus at the equilibrium price?

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is Q^D = 6 - 0.5P. Supply is given as Q^S = P. The deadweight loss due to a quota of two sticks is $_____.

Suppose the demand and supply curves for units of university credits are given by Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.