Refer to the accompanying table to answer the next four questions. Market for Public Transportation Price Quantity Demanded Quantity Supplied $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 100,000 65,000 80,000 92,000 86,000 80,000 75,000 68,000 86,000 100,000 115,000 116,000 What is the amount of the shortage or surplus in the market for public transportation when the price ceiling is $1.00? a) a surplus of 86,000 O b) a shortage of 75,000 Oc) a shortage of 40,000 d) a surplus of 100,000 e) a shortage of 12,000
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- Refer to the figure, Price (dollars) 600 550 500 450 400 350 300 250 200 150 100 50 0 Market for Game Consoles S 10 20 30 40 50 60 70 80 90 100110 Quantity Toola DL 0 O Use the graph to show the area representing the deadweight loss, and then determine the deadweight loss created as a result of setting the price at $150. Instructions: Use the tool provided "DL to illustrate this area on the graph. Deadweight loss: $1. Using the following Supply and Demand schedules for bicycles to answer the questions below. Quantity Demanded (Qd) Price Quantity Supplied (Qs) $300 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response to lobbying by the Bicycle Ridders Association, Congress places a price ceiling of $700 on bicycles. What effect will this have on the market for bicycles? Why? b. In response to lobbying by the same Bicycle Ridder Association, Congress places a price ceiling of $400 on bicycles, Using the information above, impose the price ceiling. What is the result of the price ceiling of $400 on bicycles?Using the table below answer the following question Price Quantity demanded Quantity supplied $300 60 30 $400 55 40 $500 50 50 $600 45 60 $700 40 70 $800 35 80 In response, to lobbying by the skate board association, the government places aprice ceiling at the price of $700 on skate boards. What will this have on the marketfor skate boards? Explain your answer
- age Price $45 $35 $25 Quantity Quantity Demanded Supplied 600 900 700 700 800 500 Use the table of information. For this market, which of the following statements is (are) correct? (x) If the government imposes a price ceiling of $45 in this market, the result is a chronic shortage of 300 units. (y) A binding price ceiling would exist at any price below $35. (z) If the government imposes a price ceiling of $25 in this market, the market will sell 200 fewer units than it would in the absence of a price ceiling. O O O Select one: O A. (x), (y) and (2) OB. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only Next page - Ber5. The Canadian government provides subsidies to diaper manufacturers to produce biodegradable diapers and reduce waste created. What happens to the market when the government introduces a subsidy?The market supply and demand for a product are shown in the diagram below. PRICE $6 Supply Demand 80 200 QUANTITY (a) Is the price elasticity of supply less than one, equal to one, or greater than one? Explain. (b) Calculate consumer surplus at the equilibrium price. Show your work. (C) Now suppose the government imposes a per-unit tax of $1 on producers. (i) What happens to total revenue received by producers after they pay the tax to the government? Explain. (ii) Will producer surplus increase, decrease, or stay the same? (iii) Will total surplus increase, decrease, or stay the same? Explain.
- 8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.p ($/unit) 200k 160 120 80 40 5000 Equilibrium price =$ Equilibrium quantity a) What are the equilibrium price and quantity for the supply and demand curves in the figure above? = S (quantity) Consumer surplus =$ i 10000 b) Estimate the consumer and producer surplus. Producer surplus =$ i Round your answers to the nearest thousand. SUPPORTThe following diagram represents market for a normal good. Demand and Supply Price $10 $9 Quantity Demanded Quantity Supplied $8 $7 $8 $5 $4 $3 $2 $1 $0 0 1 2 3 4 5 6 78 9 10 Quantity a) What are equilibrium price and equilibrium quantity? Calculate consumer surplus, producer surplus and total surplus. Show your work b) If the government imposes price ceiling of $2 in this market, will there be a surplus or shortage? Calculate. Show your calculations. c) Calculate consumer surplus and producer surplus when the price ceiling is in place. Show your calculations, show the area of cach surplus and DWL on the graph. d) Assume now, that the government imposes a price floor of $7. Calculate the consumer surplus, producer surplus and deadweight loss. Show your calculations.
- 5. The current equilibrium price per pack of cigarettes is $4. Every day 40 million packs of cigarettes are sold. In order to recover some of the health care costs associated with smoking, the government imposes a tax of $2 per pack. This will raise the price to $5 per pack and reduce the quantity demanded to 30 million packs at that price, while the quantity supplied at$3 per pack is now 30 million packs. a. Draw a supply and demand diagram of cigarettes before the tax. Label CS and PS b. On a new diagram, show the effect that the tax has by labeling the following i. New consumer surplus ii. New producer surplus iii. Government revenue from excise tax iv. Deadweight lossA/B/C Price $2.00 1.50 1.00 20 27 28 35 aty A $2.00 B $1.50 C $1.00 3 Which price would result in a shortage?The following is a Table that contains the demand and supply schedules of chocolate ice-creams. Price (cents per ice-cream) $0.90 0.80 0.70 0.60 0.50 0.40 Quantity Demanded (millions per day) 1 asifWNH 2 3 4 5 6 Quantity Supplied (millions per day) 7 6 10 10 5 4 3 2 a) If there is no tax on ice-creams, what is their price and how many are produced and consumed? b) If a tax of $0.20 cents is imposed on every ice-cream consumed, what happens to the price of an ice-cream and the number produced and consumed? Illustrate the effects of this policy on the market for chocolate ice-creams. c) How much tax does the government collect and who pays it?