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Market for Michigan Blueberries Supply Price 15 ( Dollars per box) Quantity 348 Quantity Supplied 180 Demanded (Millions of boxes) (Millions of boxes) 8 6 8 8 8 8 8 6 8 PRICE (Dollars per box) 60 120 180 240 300 360 420 480 540 600 QUANTITY (Millions of boxes) In this market, the equilibrium price is S per box, and the equilibrium quantity of blueberries is million boxes. For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price Quantity Demanded Quantity Supplied (Dollars per box) (Millions of boxes) (Millions of boxes) Pressure on Prices 15 35 True or False: A price ceiling below $25 per box is a binding price ceiling in this market. O True O False Because it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant blueberries on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of blueberries is much more price sensitive than the short-run supply of blueberries. Assuming that the long-run demand for blueberries is the same as the short-run demand, you would expect a binding price ceiling to result in a that is in the long run than in the short run.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (?) Market for Labor in the Fast Food Industry Wage 6 Supply (Dollars per hour) Labor Demanded 174 Labor Supplied 126 Hundreds of Hundreds of workers) workers) WAGE (Dollars per hour) -Demand 30 60 90 120 150 180 210 240 270 300 LABOR (Hundreds of workers) In this market, the equilibrium wage is |$ per hour, and the equilibrium quantity of labor is hundred workers. Suppose the mayor of Combopolis introduces a legal minimum wage of $6 per hour. This type of price control is called a For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction pressure exerted on wages in the absence of any price controls. Wage Labor Demanded Labor Supplied (Dollars per hour) (Hundreds of workers) (Hundreds of workers) Pressure on Wages 12 True or False: A minimum wage below $10 per hour is not a binding minimum wage in this labor market. O True O False3 . Effect of a tax on buyers and sellers The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $11.60 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. (?) 50 45 40 Supply 35 Tax Wedge PRICE (Dollars per bag) 10 Demand 10 20 30 40 70 80 90 100 QUANTITY (Bags of handbags) Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Bags of handbags) ( Dollars per bag) ( Dollars per bag) Before Tax After Tax4 . Total economic surplus The following graph plots the supply and demand curves in the market for motor scooters. Use the black point (plus symbol) to indicate the equilibrium price and quantity of motor scooters. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. 350 315 Demand Equilibrium 280 A 245 Consumer Surplus 210 O 175 PRICE (Dollars per scooter) 140 Producer Surplus 105 70 Supply 55 110 165 220 275 330 385 440 495 560 QUANTITY (Millions of scooters)5 . Market efficiency and market failure The following graph shows equilibrium in a free market, with equilibrium quantity of Qg. (? Supply PRICE Demand QUANTITY For any level of output equal to QB, a buyer values a unit of goods in this market the unit will cost a seller. Suppose now that a firm that produces for this market hires a private security force, reducing crime not only in their factory, but also in the small town in which it is located. This is an example of due to6 . Consumer Surplus Sharon buys an iphone for $300 and gets a consumer surplus of $60. Her willingness to pay for an iphone is If she had bought the iphone on sale for $220, her consumer surplus would have been S If the price of the iphone had been $460, her consumer surplus would have been