Question

The demand and supply for Fuji apples are given by Q^D = 17,500 - 25 P and Q^S = 10 P, where P is price per pound and Q is pounds of apples. What is the consumer surplus and producer surplus at the equilibrium?

	A.	CS = $500,000; PS = $1,250,000
	B.	CS = $750,000; PS = $1,250,000
	C.	CS = $500,000; PS = $750,000
	D.	CS = $1,250,000; PS = $500,000

The market for plywood is characterized by the following demand and supply equations: Q^D = 12,000 – 120 P and Q^S = 40 P, where P is the price per sheet of plywood and Q measures the quantity of plywood.

What is the size of the deadweight loss if the government imposes a price ceiling of $54 per sheet of plywood?

	A.	$10,460
	B.	$11,760
	C.	$8,975
	D.	$12,220

The demand and supply of iPhones in Texas is given by Q^D = 15,000 – 15 P and Q^S = 5 P-500, where P is the price per phone and Q is number of phones (in thousands).

If the Texas government levies a $10/unit tax on buyers, what is the size of the deadweight loss?

	A.	$187,500
	B.	$183,500
	C.	$199,500
	D.	$192,500

Answer 1