1) Suppose the market demand for organic grass-fed beef is given by Q=100-2P and the supply is

given by Q= P/2 (quantity is given in thousand pounds).

A) Find the equilibrium price of a pound of beef and the equilibrium quantity.

B) Find the consumer surplus (CS) and producer surplus (PS) at the market equilibrium

point.

C) How will the equilibrium change if the government imposes a price ceiling of

$20/pound?

D) Show this market with the price ceiling in a supply and demand graph.

E) Consider that the consumers who bought the beef at $20/pound are the ones with the

highest willingness to pay (scenario 1), what is the new consumer surplus (CSnew) and

the new producer surplus (PSnew)?

F) What is the deadweight loss (DWL) after the price ceiling in scenario 1?

G) What would happen in this market if, instead, the consumers who bought the beef were

the ones with the lowest willingness to pay (scenario 2)? (write in words what you'd expect to happen with CSnew, PSnew, and DWL in scenario 2).

QUESTION 2 When Mia's income increases by 10%, her consumption of noodles decreases from 100 units a

year to 70 units a year. In contrast, when her income increases by 10%, her consumption of salmon increases from 20 units a year to 60 units a year.

A) Which type of elasticity can we calculate from the information above?

B) Calculate this elasticity for noodles.

C) Calculate this elasticity for salmon.

D) Based on the elasticity calculated in part B), how do you classify noodles? Explain.

E) Based on the elasticity calculated in part C), how do you classify salmon? Explain.

F) Is either of these goods income elastic for Mia?

G) Is either of these goods income inelastic for Mia?

H) Is either of these goods a luxury good for Mia?

ONLY REFERENCES I HAVE:

https://www.youtube.com/watch?v=RxuXVuXhaTU

https://www.khanacademy.org/economics-finance-domain/ap-microeconomics/production-cost-and-the-perfect-competition-model-temporary/the-production-function/v/introduction-to-production-functions

https://www.youtube.com/watch?v=Xts5oboHEuc

(ALL INFORMATION I HAVE AND HELPFUL VIDEOS IS SHOWN ABOVE, THESE ARE THEORETICAL QUESTIONS MADE BY MYSELF INTENDED FOR SELF PRACTICE)

TRY TO COMPLETE AS MUCH AS POSSIBLE. SORRY FOR THE LACK OF REFERENCES, THANK YOU!!