Question

Demand Curve: (100,50), (150, 40), (200, 30), (250, 20), (300,10)

Supply Curve: (50,20), (100, 30), (150, 40), (200, 50), (250, 60), (300, 70)

18. What is the quantity bought and sold in the market if the government implements a subsidy of $40/unit?

a) 100 b) 150 c) 200 d) 250

For questions 19 and 20, please use the following information for the demand curve and supply curve:

QD =1000–2P QS =-200+P

19. What is the quantity bought and sold if the government implements a tax of $60/unit?

a) 150 b ) 180 c) 200 d) 400

20. What is the quantity bought and sold if the government implements a subsidy of $120/unit?

a) 180 b ) 200 c) 220 d) 240

Answer 1

18. Option d

From the below graph we can find that the a subsidy will shift the supply curve towards right and the new equilibrium is at intersection of demand curve which is of quantity 250

19. Option b) 180

20. Option d