Question

**1. Suppose the demand for village defense in Temeria is
Qd=300-2P, and the supply is Qs=4P.**

a. Graph the supply and demand curves. (3 points)

b. Solve for the equilibrium price and quantity. Show this point on your graph from part (a). (5 points)

c. How much consumer surplus is created in this market? How much producer surplus? (4 points)

d. Suppose the King of Temeria puts a tax of 10 orens per unit on village defense. Write an equation showing the relationship between the price paid by consumers and the price received by sellers. (2 point)

Answer #1

Suppose the demand for pickles on The Citadel is Qd=500-4P, and
the supply is Qs=6P. Assume this market is perfectly
competitive.
d. Suppose the Council puts a tax of $5 per unit on the purchase
of pickles. Write an equation showing the relationship between the
price paid by consumers and the price received by producers.
e. Find the new (after-tax) equilibrium quantity of pickles,
price paid by consumers, and price received by producers.
f. How much consumer surplus is created...

Assume that supply and demand are given by the equations:
QS = 500P QD = 3600 – 1000P
A $0.60 per unit tax imposed on sellers in this market.
Sketch a graph showing values for equilibrium price and quantity
before the tax, the effect of the tax on supply, and the effect of
the tax on the price paid by consumers, the price retained by
sellers, and the quantity bought and sold. Show all of these values
in your graph....

The demand and supply for a good are respectively QD = 16 – 2P +
2I and QS = 2P – 4 with QD denoting the quantity demanded, QS the
quantity supplied, and P the price for the good. Suppose the
consumers’ income is I = 2. 6) Determine the price-elasticity of
demand if P = 2. 7) Determine the income-elasticity of demand if P
= 2. 8) Determine the price-elasticity of supply if P = 4. 9)
Determine consumers’...

25) Recall the demand and supply equations: QD=20 -
2P and QS=3P.
(a) Suppose a $5 tax, T=5, has been levied on consumers: (i)
Compute the new demand curve (ii) Draw the new demand curve in
(a)
(b) Compute the DWL of the consumer and the producer after the
tax.
(c) Compute the tax revenue generated by the $5 tax.
(d) Compute the consumer surplus, CS1, after the $5
tax has been enforced.
(e) Compute the producer surplus, PS1, after...

Qd= 20-2P and Qs= 3P.
a) Draw the demand and supply curves.
b)What is the equilibrium point.
c) Computer initial Consumer Surplus, CS0. Show work.
d) Computer initial Producer Surplus, PS0. Show work.
e) Computer initial Total Surplus. TS0. Show work.
f) Supposed a $5 tax, T=5, has been levied on consumers. (i)
Compute the new demand curve (ii) Draw the new demand curve in
(a).
g) Compute the DWL of the consumer and the producer after
tax.
h) Compute...

Consider the following market for
board games: (Do NOT round values)
Qs= -20+4P Qd= 300-P
a) Calculate initial equilibrium
supply and demand.
b) Calculate consumer and producer
surplus. Show graphically.
c) Since board games make the world
a better place, the government puts a $30 subsidy on all board
games. Recalculate new equilibrium prices and quantity.
d) Show (c) in a graph and calculate
consumer surplus, producer surplus, government cost and deadweight
loss. Show these in the graph.

Consider the following market for
board games: (Do NOT round values)
Qs= -20+4P Qd= 300-P
a) Calculate initial equilibrium
supply and demand.
b) Calculate consumer and producer
surplus. Show graphically.
c) Since board games make the world
a better place, the government puts a $30 subsidy on all board
games. Recalculate new equilibrium prices and quantity.
d) Show (c) in a graph and calculate
consumer surplus, producer surplus, government cost and deadweight
loss. Show these in the graph.

Suppose that the demand and supply functions for good X
are:
Qd = 298 - 8P and
Qs = - 32 + 4p
A. Find the equilibrium price and quantity.
B. Sketch this market. [HINT: Be sure to draw the two curves
carefully, using inverse demand and supply functions to calculate
the quantity- and price-axes intercept points.]
C. Use the demand function to calculate consumer surplus.
D. Use the supply function to calculate producer surplus.
E. What is the total...

1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for
bicycles in the United States is represented by the following set
of equations:
QS U.S. = 2P
QDU.S. = 200 – 2P.
Demand (QD) and supply (QS) in the rest of the world is
represented by the equations:
QS = P
QD =160 – P. Quantities are measured in thousands and price, in
U.S. dollars. After the opening of free trade with the United
States, if the world price...

1. The market demand and supply was given as follow: Qd = 10 –
2P Qs = -5 + 3P
a) Compute for the Price equilibrium
b) Compute for the Quantity equilibrium
c) Plot/graph the following equation.
2. Given the equation, find the equilibrium price and quantity
of the following market and plot the equation. 13P – Qs = 27 Qd +
4P – 24 = 0

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