Question

**If equilibrium quantity is 10 and equilibrium price is
8, and the maximum someone is willing to** **pay is
20:**

**(2 marks each)**

- Draw a graph showing which area is consumer surplus

**Please type your answer
here****:**

- Calculate the consumer surplus.

**Please type your answer
here****:**

- What is consumer surplus in your own words?

**Please type your answer
here****:**

- Define producer surplus in your own words?

**Please type your answer
here****:**

- How do you know if a market is efficient?

**Please type your answer
here****:**

CHAPTER 9: Demand & Supply

- Describe how the invisible hand works:

**Please type your answer
here****:**

Answer #1

1. Define consumer surplus and producer surplus. Explain why the
equilibrium price and quantity maximizes the sum of producer plus
consumer surplus (the total surplus).

Suppose that the world price of cars is less than the
domestic market equilibrium price in Italy. Further, suppose that
the government decides to impose an import quota to decrease the
number of cars imported into Italy.
A. Using a graph, demonstrate the effect of the quota on the
quantity demanded and supplied domestically and the equilibrium
price, compared to the market equilibrium with free trade.
B. Illustrate on your graph the area that represents lost
consumer surplus due to...

. Suppose that, in the market for cars, demand is given by P= 10
– Q and supply is given by P= Q.
A. What is the market price that maximises total economic
surplus?
B. Illustrate on a graph and calculate consumer and producer
surplus at this price.
(Remember to clearly label any relevant prices and
quantities.)
C. Explain why no other market price leads to a Pareto efficient
outcome. (You can draw the graph, take a picture and attach...

Question 1. A. What happens to the equilibrium price and
quantity of hamburgers when the price of tacos, a substitute,
falls? How have the supply and demand curves for hamburgers
shifted? Draw a graph showing these shifts.
B. What happens to the equilibrium price and quantity of
hamburgers when the price of cattle feed increases? How have the
supply and demand curves for hamburgers shifted? Draw a graph
showing these shifts.
C. What happens to the equilibrium price and quantity...

For the following set of demand and supply, equations do the
following,
Find the equilibrium price and equilibrium quantity for each
set of equations.
Draw each set of equations in a clearly labeled graph and show
the equilibrium P and Q.
Calculate the consumer surplus at the equilibrium P and Q found
in b.
If the price were to increase, calculate the loss in the
consumer surplus. Calculate the total new consumer surplus.
If the price were to decrease, calculate...

Using a clearly-labeled graph, show how an increase in consumer
income would affect the equilibrium price and quantity of an
inferior good. Show the consumer and producer surplus after this
increase in income.

Suppose demand for apartments in Honolulu is P=6600-0.5q and
supply is P=0.25q. Derive the equilibrium price and quantity for
apartments. Show on a graph. Calculate the producer and
consumer surplus. If the city of Honolulu passes a rent control,
forcing a rent (or price) ceiling equal to $1800, what is the
quantity supplied, quantity demanded, and the
shortage? Calculate the new consumer surplus, producer
surplus, and deadweight loss, and show these on your graph. If a
black market develops after the rent...

Suppose that the market for milk is initially perfectly
competitive.
a) Draw a supply and demand diagram showing the equilibrium
quantity of milk produced and the market price. Be sure to label
all part of your diagram.
b) On your diagram from Part (a), label the consumer and
producer surplus.
c) Suppose that the government permits an industry association
to form which issues production quotas to each dairy farmer. If the
sum of the quotas are less than competitive market...

Assume that the market for milk is initially perfectly
competitive.
1. Draw a supply and demand diagram showing the equilibrium
quantity of milk produced and the market price. Be sure to label
all part of your diagram.
2. On your diagram from Part (a), label the consumer and
producer surplus.
3. Suppose that the government permits an industry association
to form which issues production quotas to each dairy farmer. If the
sum of the quotas are less than competitive market...

Let D = demand, S = supply, P =
equilibrium price, Q = equilibrium quantity. What happens
in the market for solar panels if the government offers tax breaks
to encourage manufacturers to produce more solar panels?
Show graphically the shift. Clearly label everything, properly
show the shift, the original equilibrium and the new
equilibrium.
To upload your answer, you can either draw the graph by hand,
take a picture then upload image, or plot the graph using Word or...

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