When the market price is held above the competitive level, the deadweight loss is composed of: Select one: a. There is no deadweight loss if the government uses a price floor policy to increase the price. b. producer surplus losses associated with units that used to be traded on the market but are no longer exchanged. c. producer and consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged. d. consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
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Lesson 10 Question 10
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- Assume the market for headbands is characterized by a downward sloping demand curve and an upward sloping supply curve. Suppose there is an improvement in technology for producing headbands. Which of the following would occur? A C E The total surplus (sum of producer and consumer surplus) would increase B The change in equilibrium price would cause total producer surplus to increase D The impact on total consumer surplus would be indeterminate, because of the offsetting impact of the changes in equilibrium price and quantity The supply curve would shift up, resulting in an increase in the equilibrium quantity and total producer surplus The demand curve would shift right in response to an increase in equilibrium price https://bcps.schoology.com/common-assessment-print/course/6305214264/6083116066?multipleQuestions=1&includeAnswerkey=1&includeBlank 10/33Figure 7-5 Price P₁ B C a. D b. AX O OC. B Od. C D Refer to Figure 7-5. What area represents producer surplus when the price is P1? QuantityHow does the market equilibrium define what suppliers will stay in the market and what will leave the market? Explain based on the concept of producer surplus
- What is producer surplus, and how is it measured? What is the relationship between the cost to sellers and the supply curve? 2. Why do flounder populations face the threat of extinction while goidfish populations are in no such danger The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the goverment imposes an excise tax on gasoline to account for the negative extemality that deivers impose on one another. Why might the private market not reach the socially optimal level of traffie on the road without the help of goverament? A key difference berween accountants and economists is their ditferent treatment of the cost of capital Does this cause an secouutants estumate of total costs to be higher or lower than an economist's estimate? ExplainCreate an o riginal graph in equilibrium like the one in the last problem. Label everything, including the letters that would correspond to CS, PS, etc. Gooo A... Price 30-00+ 20.00 10.00- 0.00- 5 S 0.00 20.00 30.00 Quantity ix. original consumer Surplus? k. original producer Surplus? Xi. Total Market Surplus? équilibrium 10,00 In equilibrium what are the letters and the total dollar amounts that correspond to the area for the... xii. New Consumer Surplus? xiii. New Producer Surplus? 40.00 Xiv. Area that was transferred? XV. Dead weight Loss? Xvi. Remaining Surplus? 50.00 Assume an effective quota has been placed on the market changing the quantity by 2,000 units. Show what happens when an effective price floor is placed on this market. what are the letters and the total dollar amounts that now correspond to the...1) The following table displays the marginal costs (MC) of Les, the sole producer in the market, and the marginal benefits (MB) of Eddie, the sole consumer in the market: Quantity of Guitars MC of Les MB of Eddie 1 800 2700 2 1000 2200 3 1200 1800 4 1500 1500 5 1800 1200 6 2200 1000 7 2700 800 Assume now that Leo, the minister of guitars, sets a price floor at $1800. What is the market deadweight loss? $ __________
- Deadweight loss is the reduction in economic surplus resulting from a market not being in competitive equilibrium. In the diagram to the right, deadweight loss is equal to the area(s): O A. C&E. O B. A, B, & C. OC. B&D. P1 O D. A. P, B Do Quantity (per time period)Click on the icon to read the news clip, then answer the following questions. www The graph shows the market for milk in Venezuela when a price control is in effect. Draw a shape that represents: 1) consumer surplus. Label it CS. 2) producer surplus. Label it PS. 3) the deadweight loss. Label it DWL. Also draw a shape that show the resources lost from time spend in line. Label it Loss. Moving from a milk market with no price controls to a milk with price controls consumer surplus and producer surplus. OA. increases; decreases OB. decreases; increases Oc. increases; increases OD. decreases; decreases In the market for cheese, OA. the price is below the market equilibrium 9 O 60- 50- 40- 30- 20- Price (bolivars per gallon) 10+ 0 40 $ 100 Price control 300 200 300 400 500 600 700 Quantity (gallons of milk) >>> Draw only the objects specified in the question. D NextQ20 In Canada we have government intervention in the dairy market in the form of quotas on milk production. What are two predicted economic effects of this policy? a. A redistribution of income from dairy farmers to consumers of dairy products and an increase in the total amount of economic surplus in the dairy market. b. An equitable distribution of income between dairy farmers and consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. c. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in deadweight loss in the dairy market. d. A redistribution of income from dairy farmers to consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. e. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in the total amount of economic surplus in the dairy market. Clear my choice
- A county in U.S. has a market for jewelry which buyers and sellers decide the price of jewelry. The reginal price for it is above the county price and jewelry are a tradable. Using simple diagrams and proper labels show this situation, and the resulting consumer and producer surplusThe year is 2021, and the world has been fighting for hand sanitizer. For that reason, the cost of a 20 Oz bottle of hand sanitizer is now $120 rather than $6o. In this case, what will be the producer surplus for the new producers? The ones that entered the market after the price change. a) 400 b) 800 c) 1200 d) 1700 e) 3600 f) 2400 g) 3000 Price 120 Supply 60 Quantity 80 1604. Suppose the demand for pickles on The Citadel is Qd=500-4P, and the supply is Qs=6P. Assume this market is perfectly competitive. a. On the back of the page, graph the supply and demand curves. b. Solve for the equilibrium price and quantity of tents. Show this point on your graph from part (a). c. How much consumer surplus is created in this market? How much producer surplus? d. Suppose the Council puts a tax of $5 per unit on the purchase of pickles. Write an equation showing the relationship between the price paid by consumers and the price received by producers. e. Find the new (after-tax) equilibrium quantity of pickles, price paid by consumers, and price received by producers. f. How much consumer surplus is created by this market after the tax? How much producer surplus? g. How much tax revenue is generated by this tax? How much deadweight loss does the tax cause?