Question
Refer to the accompanying table which shows the market for a sweetened carbonated beverage. Use the given information to answer questions 19 - 25. Price
Refer to the accompanying table which shows the market for a sweetened carbonated beverage. Use the given information to answer questions 19 - 25.
| Price (per box) | Quantity Demanded | Quantity Supplied |
| $10 | 9,000 | 3,000 |
| $15 | 8,000 | 3,500 |
| $20 | 7,000 | 4,000 |
| $25 | 6,000 | 4,500 |
| $30 | 5,000 | 5,000 |
| $35 | 4,000 | 5,500 |
| $40 | 3,000 | 6,000 |
| $45 | 2,000 | 7,000 |
19. Price ceiling = $40, find Qd.
20. Price floor = $15, find the market price. Answer: The market price = $_______________
21. How much is the shortage if price ceiling = $15?
22. Assume that the price floor = $45 is imposed. Find the black-market price. Answer: The black-market price = $_________.
23. Assume that the price floor of $45 is imposed. The government will buy back any surplus with the price = $45. How much does the government need to spend to buy back the surplus? Answer: The government needs to spend $___________ to buy back the surplus
24. (This is a bonus question. This question is worth 2 points.)
What is an intended purpose for the government to impose a binding price floor on the market for sweetened carbonated beverages?
Consider a firm selling good G and the market for good G is perfectly competitive. The following table presents the costs of a firm.
Use the given information to answer questions 37 - 42.
| AFC | AVC | ATC | MC | |
| 1 | $200 | $80 | $280 | $80 |
| 2 | 60 | 160 | 40 | |
| 3 | 50 | 30 | ||
| 4 | 47 | 97 | 38 | |
| 5 | 50 | 90 | 62 | |
| 6 | 62 | 122 | ||
| 7 | 80 | 188 | ||
| 8 | 100 | 240 | ||
37. Find the TFC. Answer: TFC = $_________
38. Find the TVC when Q = 8. Answer: TVC = $__________ when Q = 8.
39. Find the TC when Q = 7. Answer: TC = $__________ when Q = 7.
40. Suppose the market price = $190, find the profit-maximizing quantity.
Answer:
41. Suppose the market price = $190, find the maximized profit.
Answer: The maximized profit = $____________
42. Mary is the manager of that firm. A production machine for making good G broke down. Mary does not want to dispose of the machine because she spent $50,000 to buy the machine 10 years ago. What is wrong with the reasoning?
A) The accounting profit generated is greater than $10,000.
B) $10,000 spent is a sunk cost. It should not be considered when making the decision now.
C) The $10,000 spent 10 years ago is a part of the marginal cost now.
D) The economic profit generated is greater than $10,000.
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Climate Policy And Nonrenewable Resources The Green Paradox And Beyond
Authors: Karen Vollebergh, Rick Van Der Ploeg
1st Edition
0262319845, 9780262319843
