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Please refer to the background information below to answer the following two questions. Suppose that the demand and supply of legal services in Utopia are
Please refer to the background information below to answer the following two questions. Suppose that the demand and supply of legal services in Utopia are given below: Demand: @ =90.3 9P thousand hours Supply: @ =4.3+4+5P thousand hours in which @ is the amount of legal services in thousands of hours and P is the price per each hour of legal services (in $). The unregulated market equilibrium price is $6.14 per hour and the market equilibrium quantity is 35.01 thousand hours. 16. To encourage the citizens to acquire more legal services, the government puts forward a subsidy of $10 per each hour of legal service acquired. After the subsidy, buyers pay $[ Answerl6A | per hour less than before and sellers receive [ Answerl6B | per hour more than before. 17. To finance the subsidy, the government will need to raise $| Answerl7A | thousand. The subsidy will generate a deadweight loss of [ Answer17B | thousand. Please refer to the background information below to answer the following three questions. The market demand for widgets is given as follows. Demand: P =640 4@ dollars per unit Suppose that the government imposes a price ceiling at $160 per unit. After the ceiling is imposed, 40 units are produced and traded. 18. After the ceiling is imposed, there will be an excess demand of [ Answerl8 | units. 19. At this proposed price ceiling, the maximum possible consumer surplus will be $[ Answerl9 |. 20. If there is a competitive market for bribery to determine the allocation, the bribe at the equilibrium will be $[ Answer20A | per unit, and the consumer surplus will be $[ Answer20B |
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