3. Suppose you are a manufacturer of milk and it produces 900 liters and sells it for $ 15 Lt and due to social development policies, the government decides that the price of the good should be lowered by one peso, therefore it should be sold at $ 14 per liter, with which people will have more access to buy it and will influence an increase in the quantity demanded, now having to produce 1,300 liters of the good. a. Determine the elasticity of demand. b. Determine the degree of Lerner's monopoly power.

The following graph plots a supply curve for some hypothetical good. PRICE (Delar per un QUANTITY (UN) Supply For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic Region Elastic Inelastic Between X and Y O O Between V and W O

Imagine that the government wages a major war on illicit drugs. Assuming that both at the point of initial and new market equilibria demand for illicit drugs is INELASTIC, what should happen to the amount of money that the drug dealers are getting from selling the drugs if the government measures are successful and the supply of illicit drugs at the market drops? The amount of money received by the drug dealers goes up The amount of money received by the drug dealers goes down The amount of money received by the drug dealers does not change

èstion 13 if price ceiling is set above equilibrium price then equilibrium price and equilibrium quantity will not be affected. True False

The hypothetical country of Crabby Island has imposed a production quota of 4,000 crabs per month. Use the line segment in the graph below to show this production quota then answer the following question. Price ($) 10 9 8 7 (O 5 4 3 2 1 2000 Production quota 4000 6000 Quantity (crabs per month) Supply Demand 8000 10000 1. Use the line segment to show a production quota of 4,000 crabs per month. 2. What is the price of crab after the introduction of the quota? GA Number

Hand written solutions are strictly prohibited.

1. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. IThat is, tell us that the original equilibrium price…

Let's assume that each person in the U.S consumes an average of 37 gallons of soft drinks(nondiet) at an average price of $2 per gallon and that the U.S population is 294 million. At a price of $1.50 per gallon, each individual demand schedule, Calculate the market demand schedule for soft drinks for the prices of $1.50and $2 per gallon.

Which of the following pair of events leads to a DEFINITE decrease in the price of baby food? * An increase in the birth rate and a decrease in wages for workers in the baby food industry. O An increase in the birth rate and an increase in regulations for baby food production. O An increase in the birth rate and a decrease in regulations for baby food production. A decrease in the birth rate and a decrease in wages for workers in the baby food industry. A decrease in the birth rate and an increase in wages for workers in the baby food industry.

10. Price controls in the Florida orange market The following graph shows the annual market for Florida oranges, which are sold in units of 90-pound boxes. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Florida Oranges 50 I Price (Dollars per box) 45 Supply 20 40 Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) 486 360 35 30 25 20 bemand 15 10 5 90 180 270 360 450 540 630 720 810 900 QUANTITY (Millions of boxes) PRICE (Dollars per box)