Current Stats for Gasoline: Government Enforced Price Ceiling - $4.50/gallon Current Market Equilibrium - $3.00/gallon OPEC, the largest global supplier of oil used to make gasoline, has decided to reduce output by 50%. This policy change is expected to drive up the cost of gasoline to $5.00/gallon. How does that price change interact with the price ceiling? A.   Changes the Price Ceiling from Binding to Non-Binding B.   Disrupts Oil Supply C.   Changes the Price Ceiling from Non-Binding to Binding D.    No Change

What is Consumer Surplus at a price of $5? Price Quantity Demanded Quantity Supplied 12 1 6 10 2 5 8 3 4 6 4 3 4 5 2 2 6 1 Multiple Choice $4 $20 $16

What is Producer Surplus at a price of $5? Price 12 10 8 6 42 Quantity Demanded 1 2 WN 3 456 Quantity Supplied 6 5 4 3 2 1

12- 11- Price of Santa hats (5) 9. 2 1 2000 4000 6000 8000 Quantity of Santa hat Supply Demand 10000 Suppose a 3 dollar tax is imposed on the market for Santa hats depicted above. Consumers will then pay a post-tax price of dollars (give a whole number).

18-19. In the competitive market for white sugar, consumer demand is given by P=100-0.050 and suppliers' behaviour is represented by the supply curve of P=1+0.005Q, where P is measured in dollars and Q is measured in kilos per month. Questions 17 through 19 refer to this market. 18. Imagine now that the government imposes a price ceiling of $5.00 per kilo on sugar, and that the ceiling is obeyed by all market participants. In the resulting equilibrium the total number of kilos of sugar exchanged in the market is equal to: A) 2100 G) 800 B) 2000 H) 600 A) $5 G) $70 C) 1900 I) 400 B) $10 H) $80 19. Suppose suppliers obey the price ceiling but consumers sell sugar on a black market. What will the black market price for sugar be? D) 1400 E) 1200 J) None of the above C) $10.50 I) $21 E) $50 F) 1000 D) $40 J) None of the above F) $60

Retail Demand: Q = 16 - Pr Farm Supply: Q = 2 + .5Pf Marketing cost per unit: $5 Draw a graph of the market showing all relevant curves and functions on graph paper. 3. What is the equilibrium quantity? What is the farm price at this quantity? What is the retail price at this quantity? 4. What is the retail elasticity of demand at the market equilibrium? 5. What is the farm-level elasticity of demand at the market equilibrium?

Given the chart below, what is the equilibrium price and quantity? Market for Bottled Water $4 $2 30 60 90 120 Quantity (In Thousands) Provide your answer below: a = thousand, p = $ per gallon Price per Gallon

In Figure 1, suppose the marginal value for gasoline falls by $6 for every quantity demanded for all gas stations in the market. Next, assume that the government enacts a price ceiling of $2. What is the loss in consumer surplus? A) $6B) $2C) $12D) There is no consumer welfare loss because prices are lower.E) There is not enough information to calculate.

Consider the following figure. Price $4.00 O $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 0 5 15 Quantity A price floor set at $2.50 will result in 10 a surplus of 10 units. a surplus of 5 units. a shortage of 10 units. 20 25 30 a shortage of 5 units. no change to the market outcomes. Supply Demand 35 40

Refer to the attached graph.  Assume that the governments of the six states comprising New England impose a uniform price ceiling on electricity that is below the equilibrium price P2 you arrived at in Question 3.   Please illustrate the impact of this price ceiling policy on New England’s electricity market graphically. Label this new effective price ceiling as PC; and indicate graphically the impact of the price ceiling, the quantity demanded and quantity supplied at this price, and clearly show any possible surpluses or shortages of electricity.