question (a, b, c)

Who loses? 3. A recent study found that the demand-and-supply schedules for Frisbees are as follows: tsis relativeh Price per Quantity MAN Quantity Frisbee Demanded are not Supplied $1 1 1 million Frisbees 15 million Frisbees 10 2 12 gnilipwould hal 8 3 6 10 than ofNUa. What are the equilibrium price and quantity of Frisbees? b. Frisbee manufacturers persuade the government that Frisbee production improves scientists' understanding of aerodynamics and is thus important for national security. A concerned Congress votes to impose a price floor $2 above the equilibrium price. What is the new market price? How many Frisbees are sold? c. Irate college students march on Washington and demand a reduction in the price of Frisbees. An even more concerned Congress votes to repeal the price floor and impose a price ceiling $1 below the former price floor. What is the new market price? How many Frisbees are sold?5. A senator wants to raise tax revenue and make workers better off. A staff member proposes raising the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid by workers. Would this accomplish the senator's goal? Explain. DUO, less uilall 7. Congress and the president decide that the United States should reduce air pollution by reducing its use of gasoline. They impose a $0.50 tax on each gallon of gasoline sold. a. Should they impose this tax on producers or consumers? Explain carefully using a supply-and- demand diagram.If the demand for gasoline were more elastic, would this tax be more effective or less effective in reducing the quantity of gasoline consumed? Explain with both words and a diagram. . Are consumers of gasoline helped or hurt by this tax? Why? d. Are workers in the oil industry helped or hurt by this tax? Why? 8. A case study in this chapter discusses the federal minimum-wage law. a. Suppose the minimum wage is above the equilibrium wage in the market for unskilled labor. Using a supply-anddemand diagram of the market for unskilled labor, show the market wage, the number of workers who are employed, and the number of workers who are unemployed. Also show the total wage payments to unskilled workers. . Now suppose the Secretary of Labor proposes an mcrease in the minimum wage. What effect would this increase have on employment? Does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither? c. What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither? (1. If the demand for unskilled labor were inelastic, would the proposed increase in the minimum wage raise or lower total wage payments to unskilled workers? Would your answer change if the demand for unskilled labor were elastic? 9. At Fenway Park, home of the Boston Red Sox, seating is limited to about 38,000. Hence, the number of tickets issued is fixed at that figure. Seeing a golden opportunity to raise revenue, the City of Boston levies a per ticket tax of $5 to be paid by the ticket buyer. Boston sports fans, a famously cwm-mmded lot, dutifully send in the $5 per ticket. Draw a wellm ' ' f the tax. On labeled raph showmg the impact 0 ' Whom dgoes the tax burden fallthe team 5 owners, the fans, or both? Why? !,_._J LILC ICLL 10. A market is described by the following supply and demand curves: OS = 2P OP =300 - P a. Solve for the equilibrium price and quantity.d. Instead of a price control, the government levies b. If the government imposes a price ceiling of $90, a tax on producers of $30. As a result, the new does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity supply curve is: demanded, and size of the shortage or surplus? Qs = 2(P - 30). c. If the government imposes a price floor of $90, Does a shortage or surplus (or neither) develop? does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus? demanded, and size of the shortage or surplus? En I ynem wol Ssong