Consider the following supply and demand functions 9D 14 - p 9s = -6 + 3p as Assuming the market is distortion free, what is the total welfare level? =
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- PRE-PROBLEM #8: Welfare Analysis The estimated market demand function for electric vehicles (E) is QE = 200 - 6pE + 5Y, and the supply function is QE = 100 + 4PE- A. Solve for equilibrium price and quantity in the market for electric vehicles. The price of electric vehicles is på and household income is Y. Currently household income, Y, is 40 (all dollar amounts are in thousand dollars). B. At the market equilibrium, what is consumer surplus? FYI: Use 40 in your calculations, not 40,000. Also, your equilibrium price and quantity results will also be in thousands. FYI: Since this is a straight-line demand curve, consumer surplus is the area of a triangle. Area of triangle =(base*height)/2 C. Suppose that household income increases from 40 to 44 (thousand dollars). What is consumer surplus in the market for electric vehicles at the new equilibrium? FYI: With the increase in household income, the demand curve will shift out (electric vehicle is a normal good). The shift in demand leads to…The equations below represent the inverse demand and supply curves for construction workers in Small City. Quantities are given in thousands of hours. pD= 75 − 2q, ps= 0.5qThe price and quantity of equilibrium in this market are p*= 15 and q*= 30. The city decides to establish a minimum wage (in effect, a price floor) equal to pf= 18. a. Do a welfare analysis comparing the equilibrium before and after the price floor. b. A neighboring city, called Big City, is going through a housing boom and has a high demand for construction workers. Big City is willing to hire as many hours of construction work as Small City can provide for a wage equal to Small City’s minimum wage (pf= 18). How does the hiring of Small City hourly construction workers by Big City developers affects total welfare in Small City? c. Assume that the minimum wage was removed from Small City, but Big City is still hiring all construction workers willing to work for $18/hour. Social norm dictates that construction workers…Next, consider an example of DWL in the labour market. Suppose the demand for labour is given by the fixed gross wage W = $16. The supply is given by W = 0.8L. (a) Illustrate the market geometrically. (b) Calculate the equilibrium amount of labour supplied, and the supplier surplus. (c) Suppose a wage tax that reduces the wage to W = $12 is imposed. By how much is the supplier’s surplus reduced at the new equilibrium?
- Consider the demand ftunction for processed pork in Canada, Q, = 796.00 - 37p • 20p, + 3p. + 0.002Y %3D The supply function for processed pork in Canada is: Q = 363.00 + 54p - 60ph pis the price of pork Pp is the price of beof = $4 per kg Q is the quantity of pork demanded Pe is the price of chicken = $3 per kg Y is the income of consumers = $12,500 Ph is the price of a hog = $1.50 per kg (measured in millions of kg per year) Solve for the equilibrium price and quantity for pork. The equilibrium price of pork is S and the equilibrium quantity of pork is milion kg per year. (Enter numeric responses using real numbers rounded up to two decimal places.)Please helo me with this question There are 50 residents that live in a small town in California. Each resident uses electricity and there is one power station that produces electricity for the residents from coal. Each residents' demand for electricity is Q = 10 - 2P and the supply function for the power plant is Q = 150P. For each unit of electricity that the power station produces, there is a corresponding release of pollution that leads to asthma and other health problems for the 50 residents. The marginal damage of each unit of electricity produced, per person, is $.05. a. What is the market equilibrium price and quantity per unit of electricity? b. What is the efficient Pigouvian tax per unit of pollution? c. The government of this small California town decides to impose the efficient Pigouvian per unit tax on the power station. What is the new social optimum price and quantity per unit of electricity? d. What is the government tax revenue? e. What is the gain in total…Explain why voluntary transactions improve social welfare.
- 4. 2.4 from Microeconomic Analysis Let f(r1, 2) be a production function with two factors and let wi and wa be their respective prices. Show that the elasticity of the factor share (wr2/wx1) with respect to (21/a2) is given by 1/o – 1Explain why voluntary Martians improve social welfare.The following graph input tool shows the daily demand for hotel rooms at the Oceans Hotel and Casino in Atlantic City, New Jersey. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool. Demand FactorInitial ValueAverage American household income$50,000 per yearRoundtrip airfare from Pittsburgh (PIT) to Atlantic City (ACY)$250 per roundtripRoom rate at the Meadows Hotel and Casino, which is near the Oceans$250 per night For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $100 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Oceans____ from rooms per night to______rooms…
- The Australian government have suggested that they might need to increase GST to help fund the COVID-19 rescue package. GST is a tax on goods and services usually paid at the point of sale. Consider the market for bread. Suppose a loaf costs $4.15 and includes a 15-cent tax per loaf. 2. What determines how the tax burden is shared between buyers and sellers?Suppose Mr. Alemu consumes two commodities, X and Y. The income of Mr.Alemu is $200, and price of X is 5 and the price of Y is 15. The demand function for the comnmodity is given as: Qx=100-0.75y +0.251px^1/3 + 2py^3/2 where Qx is quantity demand of commodity X. 7Px is the price of commodity X, py, is the price of commodity Y and I is income. Then: A. Find the price elasticity of demand. Decide whether it is elastic, unitary clastic or inelasticgiven the following solution (see attached), how would you calculate the average price paid by demander B?
