Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help! Much appreciated!!! The graph below depicts the market for rice in the country of India. Price (S] 2 EX Quantity per period

I need help! Much appreciated!!!

image text in transcribedimage text in transcribed
The graph below depicts the market for rice in the country of India. Price (S] 2 EX Quantity per period (millions of kilos) Required: 1. What is the present equilibrium price and quantity at S, and D,? (2 marks) a. Price? b. Quantity? 2. How much are rice buyers paying for all of this rice they purchase? (1 mark) a. (Price * Quantity) = 3. If the government introduces a price floor of $7 per kilo, how much in total will all of the rice buyers be paying for rice? (1 mark) a. (Price * Quantity) = 4. As a result of the price floor, what will be the total amount of this surplus? (1 mark) a. Quantity? 5. What will be the dollar amount of this surplus? (1 mark) a. (Price * Quantity) = 6. Who will be responsible for buying this surplus? (1 mark) a. Farmers or government? 7. Suppose that after the imposition of the price floor, the demand in Shiva increases by 1.5 million kilos. This increase in demand is illustrated on the graph above (D2). (3 marks) a. Now, how much in total will rice buyers be paying? b. At what price? c. At what quantity?8. After the change in demand, what would happen if, as a result of a bad harvest, the supply now decreases by three million kilos? This is illustrated by the new supply curve on the graph above called S2. (3 marks) a. What will be the new price, b. What will be the new quantity traded, c. How much will buyers spend? (Price * Quantity) = 9. What function do price ceilings and price floors have in our economy? Why does the government impose them? (2 marks)

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_2

Step: 3

blur-text-image_3

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

Essays In Our Changing Order

Authors: Thorstein Veblen

1st Edition

1351311425, 9781351311427

More Books

Students also viewed these Economics questions