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- The Chief Medical Officer has advised the government that consumption of widget-corn improves the survival rate of COVID-19 by 20%. Supposethe supply and demand functions for widget-corn are:QD = 100 – 5P (1)QS = 5P. (2) P is the price in dollar and Q is the quantity in kilograms.a. Determine the market equilibrium price and quantity of widget-corn? b. Calculate the consumer surplus, producer surplus, and total economic surplus at the market equilibrium. c. Having confirmed the positive impact of widget-corn consumption on COVID-19 patients, the government has ordered widget-cornsellers to charge $5 per kilogram.(i) What type of price regulation policy is this? Briefly explain. (ii) Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. (iii) Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. (iv) Is the outcome of the government’s policy efficient and, therefore, maintained or abandoned? Explain in detail.…3. Suppose' u¹(x¹) − − (2 − ¹;)² – (2 − ¹;)² for each agent i, and w} = w = 2 and w} = w} = 0. (a) Argue that no allocation z with r¦ ‡ r, can be Pareto optimal. (b) Argue that any allocation z with r = ris Pareto optimal. r (c) What are all of the competitive equilibria?2. Suppose the demand for a commodity depends on the price per unit P according to D = a – bP, but that a tax of t per unit is imposed on the consumers. The constants a and b are positive. The supply function is S = g(P), where g'(P) > 0. a. Express the equilibrium condition in the marker for this commodity. b. The equilibrium equation defines P as a differentiable function of t. Find dP/dt and determine its sign. c. What happens to the price P +t paid by the consumers when t increases?
- 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…Consider a market where: Consumer surplus is 250 Producer surplus is 125. If both consumer surplus and producer surplus are maximized, what is the amount of the deadweight loss? (round your answer to the nearest penny) Next, suppose that consumer surplus falls to 150, but producer surplus rises to 155. What is the change in welfare? (round your answer to the nearest penny and add the minus sign if necessary). You can conclude that the competitive output is being produced. more than less thanThis question is asking you to analyze the welfare effects of a tax on producers. Assume that theoriginal equilibrium was the perfectly competitive equilibrium and that the tax was imposed on producersafterward.a) Use a graph to illustrate the equilibrium price, equilibrium quantity, consumer surplus and producersurplus for the perfectly competitive market for commodity x (without the tax on producers). Using another graph, transcribe the relevant parts
- Suppose the demand and supply curves for unskilled labor in the labor market are as shown in the following figure. Congress is about to enact a $12 per-hour minimum wage. Congressional staff economists are urging legislators to consider adopting an earned-income tax credit instead. Suppose neither workers nor employers would support that proposal unless the expected value of each party's economic surplus would be at least as great as under the minimum wage. a. In the graph below, use the point tool provided 'Wmin' to indicate the wage and employment combination that would result in a $12 per-hour minimum wage. W ($/hour) 24 20 16 12 8 4 0 Labor Market D L (person-hours/day) S 4,000 8,000 12,000 16,000 20,000 24,000 Tools 9 Wmin b. Calculate the amounts by which employer surplus and worker surplus change as a result of the minimum wage. Employer surplus would be (Click to select) by $ per day. Worker surplus would be (Click to select) by $ per day. c. Which of the following describes…The graph on the right shows the willingness to pay of two consumers, Annie and Ben. We can determine from the graph that when the market price PM = $27, Annie's consumer surplus is and Ben's is Assuming the shaded region consists of the total market consumer surplus, then its value is $ (Enter your response as a whole number.) Consumer surplus is based on which of the following economic theories? OA. Marginal analysis OB. Marginal costs only OC. Total benefits OD. Marginal benefits only Financial incentives can help make people behave in a desired way when the incentives are O A. combined with moral suasion. OB. enough to satisfy other needs. OC. substantial. OD. provided consistently. Price ($) 100 80- 60- A 40- PM-27 20 0- 0 B D E C. Ben 40 50 Quantity sold Annie 10 20 30 60 70 80 Oo SSuppose the demand and supply curves for unskilled labor in the labor market are as shown in the following figure. Congress is about to enact a $12 per-hour minimum wage. Congressional staff economists are urging legislators to consider adopting an earned-income tax credit instead. Suppose neither workers nor employers would support that proposal unless the expected value of each party's economic surplus would be at least as great as under the minimum wage. a. In the graph below, use the point tool provided 'Wmin' to indicate the wage and employment combination that would result in a $12 per-hour minimum wage. W ($/hour) 24 20 16 12 8 4 0 Labor Market D S 4,000 8,000 12,000 16,000 20,000 24,000 L (person-hours/day) Tools -9 W. mn Ⓡ b. Calculate the amounts by which employer surplus and worker surplus change as a result of the minimum wage. Employer surplus would be (Click to select) ✔ by $ by $ per day. per day. Worker surplus would be (Click to select) c. Which of the following…
- For an exhaustible resource A. The dynamically efficient allocation is consistent with equalizing the marginal benefits of extracting the resource to the marginal costs of extraction over time B. All market failures we discussed resulted in exhaustible resources being extracted faster than is socially optimal C. The ending price, after extraction is equal, is the minimum of something called a choke price and the price of a substitute D. The choke price can never be infinite if MC of extraction are positive..(a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).what do you understand by consumer and prducer surplus ?what is the impact of price decrease on consumer surplus?and on producer surplus.show graphically and interpret.
