Use following diagram to answer the questions 10 - 16. $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 5 10 15 20 25 30 35 40 45 50 55 60 Quantity 10) In the figure above, if a price floor is set at $4, there is A) a surplus of 15 units B) a shortage of 15 units C) a shortage of 45 units D) neither a shortage nor a surplus 11) In the figure above, if a price floor is set at $4.50, then the deadweight loss will equal to A) $0 B) $60 C) $30 D) $120 12) In the figure above, suppose that a price floor of $2.50 per pound is imposed on the chicken market. And the government decides to purchase the unsold surplus chicken. Under this scenario, the quantity demanded equals to pounds and quantity supplied equals to _ - pounds. A) 30; 30 B) 20; 50 C) 50; 20 D) 20; 35 13) In the figure above, which of these price levels is an example of a non-binding price ceiling? A) $3 B) $2 C) $4 D) $2.5 14) In the figure above, which of these price levels is an example of a binding price floor? A) $4 B) $2.5 C) $3 D) $2 15) In the figure above, assume that the price floor is set at $2.5. Calculate the amount of deadweight loss if this price regulation is adopted. A) $30 B) $0 C) $60 D) $15 16) The above figure shows the market for peanuts in Wonderland. Suppose that local authority imposes a price floor of $4 per pound. Under the new price regulation price of peanut equals to - per pound. A) $4.5 B) $3 C) $4 D) $1 17) Which of the following options best describes tax incidence? A) It equals to the loss in the social welfare measured by total surplus. B) It shows how tax burden is shared by buyers and sellers. C) It equals to the sum of new consumer and producer surplus resulted from tax. D) It is revenue government agency collects from buyers and sellers from imposing per unit tax