500 700 Q (metric tons) Blood oranges are a tasty fruit with a red-colored flesh. The Italian government subsidizes the production of blood oranges by supporting their price. If the market for blood oranges from Italy is as shown in the graph above, how much does the subsidy cost the government and, ultimately, Italia taxpayers? Select one: O a. 700,000 euros O b. 500,000 euros O c. 1 million euros O d. 200,000 euros Check
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- USB memory sticks have become popular with Canadian computer users because they offer flexibility for users to move data easily from one computing device to another. Figure 1 below shows the domestic Canadian USB memory stick market. Use this information to answer the questions below. Figure 1: Canadian USB Memory Stick Market Price ($) QD Qs Per Flashdrive Millions of Units 20 6. 18 1 16 2 4 14 3 3 12 10 1 8 6. 7 4 8. 2 10 a) What is the domestic equilibrium price and quantity of USB memory sticks in Canada? Assume the Canadian USB memory stick market is an 'autarky' market (i.e. all USB memory sticks purchased by Canadian consumers are manufactured by Canadian USB memory stick suppliers). What is the total market size (i.e. total revenue or TR)? What is the consumer surplus (CS), producer surplus (PS) and total surplus (TS)? b) The Government of Canada is interested in promoting international trade. The federal government has opened the Canadian market to suppliers of USB memory…Suppose the market demand and supply curves are as given below. In each case, quantity refers to milions of litres of gasoline per month; price is the price per litre (in cents). Pa400 - 240 Supply: P= 160 + 80 Given these demand and supply equations, the equilbrkum price is 220 cents and the equilibrium quantity is 7.5 milion litres. Suppose the government imposes a tax per itre, and as a result the quantity sold is 5.8 million litres. What is the new "consumer price" and what is the new "producer price"? The new price consumers pay is 260.8 cents. (Enter your response rounded to the nearest cent.) The new price producers receive is cents. (Enter your response rounded to the nearest cent.)The table below shows how supply and demand of gasoliine vary depending on the price: Demand (million of gal.) Price ($/gal) Supply (million of gal.) 1 787 483 1.2 700 550 1.4 640 600 1.6 580 623 1.85 531 660 2.2 450 680 2.4 430 700 2.6 420 720 2.8 390 735 2.9 357 765 Note: there is some randomization in the above data to account for price fluctuations. Make sure to check that you input the correct data in your device. Perform the following work • Assume that Supply has a quadratic relationship with the price. Find this relationship (the help buttons contain an article to compute trend-lines in Excel): S(p) = Round your answer to 3 decimal places • Assume that the Demand has a quadratic relationship with the price. Find this relationship (the help button links to an article to compute trend-lines in Excel): D(p) = Round your answer to 3 decimal places Use the trendlines to find the price corresponding to the equlibrium price between supply and demand: $ per gallon Round your answer to…
- Question 4 Figure 6-20 30 16 24 18 Price 12+ 6+ $8 O $6 $2 80 O $4 160 210 240 Supply D₂ Refer to Figure 6-20. What is the amount of the tax per unit? D₁ 320 Quantitych QUESTION 55 P ($ per gallon) $2.20 $1.80 $1.40 $1.20 $1.00 $0.60 Excess supply or surplus O Equilibrium price is If supply is 680, price is If demand is 700, price is S --- An above-equilibrium price E - Equilibrium price A below-equilibrium price Excess demand or shortage 300 400 500 600 700 800 900 Quantity of Gasoline (millions of gallons) 113 hpPrice (dollars per gallon) S2 $5.50 3.50 2.50 D Quantity (millions of gallons per month) 30 40 45 Assume the graph above illustrates a new tax put into the market for soft drinks. S2 is the supply curve with the $2 tax in place. What price would consumers pay if the tax was placed on consumers instead of producers? 1) $2.00 O 2) $3.50 3) $2.50 4) $1.50
- The demand and supply curves for a product are given in terms of price, P , by 3400 – 30p and 9 = 10p – 600. (a) Find the equilibrium price and quantity. The equilibrium price is 2$ and the equilibrium quantity is units. (b) A specific tax of $16 per unit is imposed on suppliers. Find the new equilibrium price and quantity. The new equilibrium price (including tax) is $ and the new equilibrium quantity is units. (c) How much of the $16 tax is paid by consumers and how much by producers? The tax paid by the consumer is $ and the tax paid by the producer is 2$ of the tax. (d) What is the total tax revenue received by the government? The total tax revenue received by the government isThe Ministry of Misallocation has decreed that the production of widgets must be 2000 each month and the production of gizmos must be 14000 each month Calculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands. Price of widgets $10 9 8 7 6 5 4 3 2 1 Supply 0 Demand 1 2 3 4 5 6 7 8 9 10 Quantity of widgets (in thousands) A4.000 in widgets and 180,000 in gizmos OB. 8,000 in widgets and 160.000 in gizmos OC 16,000 in widgets and 300,000 in gizmos OD. 16,000 in widgets and 320.000 in gizmos OE4,000 in widgets and 360,000 in gizmos Price of gizmos $100 90 80 70 60 50 40 30 20 10 0 Supply Demand 2 4 6 8 10 12 14 16 18 20 Quantity of gizmos (in thousands).In a market which demand and supply curves are shown below: Price ($/hour) 36- 32 28- 24 20- 16 12- 8- 4- 0 Demand Supply 1000 2000 3000 4000 5000 6000 7000 Quantity (units/day) a) Calculate the consumer surplus for the market. (If necessary round your answer to the nearest whole number.) Consumer Surplus = $0 b) Calculate the producer surplus for the market. (If necessary round your answer to the nearest whole number.) Producer Surplus = $0
- 1. Retail Promotion Programs Successful retail promotion programs have the capacity to generate additional producer surplus, but it depends en the size of the relative shifts in demand and supply. Please sketch out a supply and demand figure for RTE breakfast cereal sold in retail markets that adopt a promotion campaign; this program increases demand and also leads to an increase in advertising cests that is paid for by the retailer. Now assume (and label your figure) with the following: the initial equilibrium quantity was 100,000 boxes, the quantity with the promotion in place is 105,000 boxes, the initial price was $10 per box, the price with the promotion in place is S10.15 per box, and initial fixed costs were $2 per box. Would the promotion efforts be worthwhile to retailers if: a) b) c) The promotion was funded by a $0.20/box fee? A S0.50 fee/box? A S0.60 fee/box?33 1 36 39 Bushels Demanded per Month 45 50 56 61 67 B) 10. Price per Bushel $5 4 3 2 1 C) 67. OD) 61. Bushels Supplied per Month 77 73 68 If the price in this market was set at $1 by the government (price ceiling), then the number of bushels traded would be A) 57. 61 57A person who has an addiction for a production will most likely have * an elastic demand for that product. an inelastic demand for that product. no demand for that product. an elastic supply for that product. a side siness providing copy machine services. The equilibrium price is the * price at which the market clears average price consumers are willing to pay. O price at which all consumers are satisfied. O price at which quantity supplied is maximized. O price at which all potential suppliers will sell.