1.

The supply curve for productXis given byQ_X^S= -420 + 20P_X.

a. Find the inverse supply curve.

P=_______+________Q

b. How much surplus do producers receive whenQ_x= 380? WhenQ_x= 1,060?

WhenQ_X= 380: $_______

WhenQ_X= 1,060: $_________

2.

Consider a market where supply and demand are given by Q_X^S= -14 + P_Xand Q_X^d= 91 - 2P_X. Suppose the government imposes a price floor of $42, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $42 per unit.

Instructions:Enter your responses rounded to the nearest penny (two decimal places).

a. Determine the cost to the government of buying firms' unsold units.

$________

b. Compute the lost social welfare (deadweight loss) that stems from the $42 price floor.

$________