Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

lQuestion 05 Consider the same information in question I34, but now assume the government intervenes in the competitive equiiibrium increasing the quantitvI bv 5 units

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
lQuestion 05 Consider the same information in question I34, but now assume the government intervenes in the competitive equiiibrium increasing the quantitvI bv 5 units and, consequentlv, reducing the price. As before, consider the welfare changes. which of the following alternatives is correct? {a} The consumer surplus decreases from 5225 to 43201] [b] The producer surplus increases from $45Erto $300 lcj The total surplus becomes negative {turns into a general welfare loss} [d] The intervention generates a welfare loss; the deadweight loss is 535 Question DIE As in question US, consider two different linear demand curves, A and B, passing through the same equilibrium point 91 =[G1.p1j={3l].r1-U]:p"[}= ICIICI 2E} and p913?) = TU Q. As in Solved Problem 9.4, consider a horizontal supply.I curve passing through point e1. Assume th e government im poses a tax of $11] dollars on sellers and considerthe welfare changes that fol low. which of the following alternatives is correct? {a} For demand A, the tax decreases consumer surplus bv $250 [is] For demand E, the tax decreases consumer surplus by $35 [cl For demand A, the tax generates a deadweight loss of $25 {d3 For demand E, the tax generates a deadweight loss of$25 Question D? Considerthe same information in question 06. But now assume that the supplv curve is given by p = 1U + Q and that the government is imposing a higher taa: on sellers equaI to $13 per unit. "M'rich of the following alternatives is correct? ia} The reduction in consumer surplus is larger for demand A than for demand El [b] The reduction in consumer surplus is larger for demand B than for demand A {ch The reduction in consumer surpius is file same for demands A and B {d} The revenue generated hv this tax is the same for demands A and B Queslim DB Consider 11'\"? following demand a nd supply curves for a nnual gym memberships in a certain city. Demand: Q\" = EDD 2p. Supply: Q5 = (3.5;! 5!} Assume mm the city goyemment offers a per-unit subsidy of $25 to those who sign up for an annual gym membership. Recalling what you learned in chapters [l2 a DB, nd the equilibrium pre and post subsidy. Which of the fol lowing alternatives is correct? la] The share of the subsidy benet that goes to the buyers is BEE-\"u lb] The share of the subsidy benet that goes to the sellers is 30% {cl The share of the subsidy benet that goes to the buyers is 30% {d] The share of the subsidy benet that goes to the sellers is i'D'ii Question [l9 Consider the same information in question 03. Do a welfare analysis comparing consumer surplus, producer surplus, and total surplus pre and post subsidy. Whid1 of the following alternab'yes is correct? la} The change in consumer surplus is an increase of SLED-D lb] The change in producer surplus is an increase of 5325 [c] The change in total surplus is a reduction of 5125 {d] The goyemment expenditure with this subsidy is 51,5434] Queslim ll] Consider d1e followinglinyersel demand and supply curves for construction workers in Email City. Demo rid: p\" = T5 2o. Supply: p5 = [LED The price and quantity of equilibrium are p' = 15 and l?" = 311 The city decides to establish a minimum wage tin effect, a price oor] equal to par = ll]. Do a wellare analysis comparing the equilibrium before and after the price floor. Which of the following alternatiy is correct? [Assume quantities are given in thousands of hours of consb'uction work: la} The plice floor decreases producer surplus by approx. SSthousand dollars [b] The plice floor increases consumer surplus by approx. 35 d1ousand dollars {cl The plice floor increases to1al welfare by a pprox. 11 mousa nd dollars [d] The mice floor generates a shortage lexcess supply] of ?.5 thousand hours

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Austro-corporatism Past, Present, Future

Authors: Gunter Bischof

1st Edition

1000675858, 9781000675856

More Books

Students also viewed these Economics questions

Question

List all the topics found under General Topic 200Presentation

Answered: 1 week ago

Question

A greater tendency to create winwin situations.

Answered: 1 week ago