Econ-2

Number 10 and number 20.

Question 10 5 pts When there is no intervention, the equilibrium quantity of labor is 4 and the equilibrium wage is $12. Suppose the government decides to impose a price floor in this labor market, as it thinks that a wage of $12 is too low. With the price floor, wages go up to $16, and because of that quantity supplied of labor increases to 5, whereas quantity demanded drops to 2.4. Wages Supply A $16 Price Floor B C $12 E D Demand 2.4 4 5 Quantity of Labor Price Floor text only Based on the figure above match the surplus with the correctPrice Floor text only Based on the figure above match the surplus with the correct areas: Consumer surplus before [ Choose ] price floor D, E C, E Producer surplus before A price floor B, D C Consumer surplus after D price floor B A, B, C Producer surplus after price [ Choose ] floorQuestion 20 4 pts Supply and demand schedule of loanable funds in the housing market Interest Rate Quantity Supplied Quantity Demanded 5% 130 170 5% 135 150 7% 140 140 8% 145 135 9% 150 125 10% 155 110 The table above shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. Based on that, answer the following: 1. What is the equilibrium interest rate and quantity in the capital financial market? Justify your answer! 2. Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain why the direction of the interest rate shift makes intuitive sense. Edit View Insert Format Tools Table 12pt Paragraph " B I U A y Ty