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Question 1 There are 10,000 identical individuals in the market for commodity X, each with a demand function given by Qodx = 12 - 2Px, and 1000 identical producers of commodity X, each with a function given by Qsx = 20 Px. where Qox is an individual's quantity demanded, Qsx is a single producer's quantity supplied, and Px is the price of the commodity. (a) Find the market demand function (QDx) and the market supply function (QSx) for commodity X (b) Determine the market demand schedule and the market supply schedule of commodity X (for whole dollar prices) and from them find the equilibrium price and the equilibrium quantity. (c) Plot, on one set of axes, the market demand curve and the market supply curve for commodity X and show the equilibrium point (d) Obtain the equilibrium price and the equilibrium quantity mathematically. (e) Explain why the equilibrium condition is considered stable. (f) Determine the elasticity of demand for commodity X at the equilibrium point. Question 2 Suppose that from the condition of equilibrium in Question 1, there is an increase in consumers' incomes (ceteris paribus) so that a new market demand curve is given by QDx = 140,000 - 20,000Px. (a) Derive the new market demand schedule (b) Show the new market demand curve on the graph used in Question 1(c) (c) State the new equilibrium price and equilibrium quantity for commodity X (d) Determine the Income Elasticity at the original equilibrium price and at the new equilibrium price. (Assume that the increase in income is 106). (e) In the light of your answer to 2 (d), comment on the nature of commodity X.1. The demand curve for hotel rooms is Qd = 1000-5Pp and the supply curve is Qs = 200+3Ps, where Qd is the quantity demanded and Qs is the quantity supplied, Pp is the price paid by buyers and Ps is the price received by sellers. Using the information above, find equilibrium Price and Quantity for Hotel Rooms 2. In Heartland, the minimum wage is currently $4.00 per hour and the fast-food industry is the only industry that pays the minimum wage. 50% of the workers in the industry are between 16 and 21 years old. The president of Heartland, concerned about decreasing the proportion of families with incomes below the poverty line, proposes increasing the minimum wage by 20%. a. Assume the labor market for low skilled workers is perfectly competitive. Explain why an increase in the minimum wage might reduce employment in the fast-food industry. b. Use supply and demand analysis to describe the likely effect of this increase in the minimum wage on the price and quantity sold of meals at fast-food restaurants? c. If an increase in the Minimum Wage will cause the Equilibrium Quantity of Minimum Wage Labor to decrease, would you then suggest that the Minimum Wage should not be increased? Why or Why not?Suppose the demand and supply for milk in the European Union (EU) is given by p = 124 - 0.7Q" and p = 7 + 0.2Q5, where the quantity is in the millions of liters and the price is in cents per liter, Assume that the EU does not import or export milk. (Note: 100 cents = 1 euro.) (a) Find the market equilibrium quantity, Q*, and equilibrium price, p*. millions of liters cents per liter (b) Find the consumer and producer surplus at the market equilibrium. (Round your answers to two decimal places.) consumer surplus million euros producer surplus million euros (c) The European farmers successfully lobby for a price floor of p = 40 cents per liter. What will be the new quantity sold in the market, Q? Q =[ millions of liters (d) Find the new consumer and producer surplus after the price floor. (Round your answers to two decimal places.) consumer surplus million euros producer surplus million euros (e) What is the deadweight loss from the price floor? (Round your answer to two decimal places.) million euros (f) If the EU authorities were to buy the surplus milk from farmers at the price floor of 40 cents per liter, how much would they spend in millions of euros? (Round your answer to two decimal places.) million eurosNAME: Yulie Live UIZ on price elasticity of demand Multiple Choice dentify the choice that best completes the statement or answers the question. NOTE: You may write on this questionnaire for your computations. 1) An economist estimates that .83 is the price elasticity of demand for disposable razors. This suggests that disposable razor producers could: A. advertise more to raise the price elasticity of demand. B. encourage more people to use non-disposable razors C. lower the price of disposable razors to raise more revenue. D. maximize revenues by staying at the current price. E. raise the price of disposable razors to raise more revenue. 2) If Johnny, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Johnny's pizzas in this range is: A. price inelastic. B. price elastic. C. unit elastic. Exhibit 5-6 Demand curve for concert tickets 30 are 10 Quantity of thebelo per coarm thou generate? 3) In Exhibit 5-6, suppose promoters charge a price of $30 per ticket. How much total revenue will their sales A. $300,000. B. $400,000. C. $500,000. D. $600,000. 4) Anita is a famous attorney with a great reputation in court. She charges her clients $300 for each hour she spend working on their cases. If she earned $450,000 in hourly wages last year, and by raising her rates to $350 per hou her income increased to $490,000 what can we say about the elasticity of demand for Anita's legal services? A. It is approximately equal to 2.3. B. It is approximately equal to 1.6. D. It is approximately equal to 0.45. C. It is approximately equal to 1.0. E. It is approximately equal to 0.1. A. 0.25. 5) A health club sells 50 memberships when the monthly price is $60 and 70 memberships when the monthly price $40. The price elasticity of demand for memberships at this health club is: B. 0.6. D. 0.83 C. 1.0. E. none of the above