Explain the following attachments.

A1. Assume that Canada is an importer of televisions and that there are no trade restrictions. Canadian con- sumers buy 1 million televisions per year, of which 400 000 are produced domestically and 600 000 are imported. a. Suppose that a technological advance among Japa- nese television manufacturers causes the world price of televisions to fall by $100. Draw a graph to show how this change affects the welfare of Canadian consumers and Canadian producers and how it affects total surplus in Canada. b. After the fall in price, consumers buy 1.2 million televisions, of which 200 000 are produced domes- tically and 1 million are imported. Calculate the change in consumer surplus, producer surplus, and total surplus from the price reduction. c. If the government responded by putting a $100 tariff on imported televisions, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Canadian welfare? Who might support the policy? Who might oppose it? d. Suppose that the fall in price is attributable not to technological advance but to a $100 per television subsidy from the Japanese government to Japanese industry. How would this affect your analysis?EXERCISE 3 Suppose that a firm has the production function f(r1, (2) = 201 + loge (2 + 1) (a) Does the marginal product of factor 1 increase, decrease, or stay constant as the amount of factor 1 increases? Does the marginal product of factor 2 increase, decrease, or stay constant as the amount of factor 2 increases? (b) This production function does not satisfy the definition of increasing returns to scale, constant returns to scale, or decreasing returns to scale. How can this be? Find a combination of inputs such that doubling the amount of both inputs will more than double the amount of output. Find a combination of inputs such that doubling the amount of both inputs will less than double output.(e) The most efficient way for the firm to produce output & when average total cost is minimized- the long run competitive equilibrium, Find the level of y that minimize ATC. Could this level of output ever be achieved? Explain. (f) Show that the firm's profit at the competitive outcome would be w = -]. What would happen in the long run if the firm had to operate at the competitive price? (x) Would a second firm enter this market to compete with the monopolist? What would happen if it did? You don't need to do all of the math, just explain. 5. The previous question established that this market is a natural monopoly. This question concerns price regulation of the monopolist. Use the same Information as before. (a) Suppose the government mandated that the monopolist firm set its price at the compet- itive level p'. Explain why this is a terrible idea (see answer to 4(1), and explain). (b) Suppose instead that the government set the price at po where the monopolist earns zero profit. This occurs where the demand function crosses average total cost, Find po and the corresponding quantity yo, and explain why this is where profit will be zero. (e) Calculate consumer surplus under the price regulation from 5(b) (it might help to draw a picture). Producer surplus is 2; how do we know this without doing any calculations? (d) Suppose the government gave a lump sum payment T to the monopolist firm, and then mandated that price is set at p". What is the smallest value of T that would fix the problem from S(a)? Explain. (c) Calculate consumer surplus if the price is set at p" (it might help to draw a picture). If consumers had to collectively pay a lump sum tax of 7, what is the largest value of T that would make them prefer the competitive price with the tax to the monopolist price Im with no tax? Is it feasible to achieve the competitive price? Explain. (f) What consideration(s) have we not mentioned in this discussion of regulation? Why would price regulation be more difficult in the real world than described here? e w ] 811. Suppose that the market for hotel rooms (one-night stay) has the following supply and demand schedules: Price of a Quantity demanded Quantity supplied room (thousands) (thousands) $150 100 10 $160 90 15 $170 80 20 $180 70 25 $190 60 30 $200 50 35 $210 40 40 $220 30 45 $230 20 50 $240 10 55 $250 0 60 a) Using this information, draw the demand curve and the supply curve for hotel rooms. b) What is the equilibrium price and quantity for rooms? c) Assume the government levies a tax of $30 per night. What is the price that consumers will pay for a room now? d) What is the price that hotels will receive when someone stays for a night? e) Illustrate the effect of this tax in your diagram from part a. f) Calculate the government revenue raised by this tax. diagram. g) Is the market efficient. with the $30 excise tax? Explain. Illustrate your answer with a