ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- The graph shows the market for game consoles. Suppose 1 million game consoles a year are being produced Draw the deadweight loss on game consoles. Suppose the quantity of game consoles produced is 1 million and the price is the equilibrium price Price (dollars per game console) 600- 500- 400- 300 300- Calculate the consumer surplus, producer surplus, and deadweight loss 200- The consumer surplus is $million 100- The producer surplus is $ million The deadweight loss is $million 3 Quantity (millions of game consoles per year) >>> Draw only the objects specified in the questionarrow_forward1. Here is the demand for coconuts: P 3 4 5 6 7 8 9 11 13 16 20 QD 1100 1000 900 800 700 600 500 400 300 200 100 And here is supply P 3 4 5 6 7 8 9 10 11 12 13 QS 100 200 300 400 500 600 700 800 900 1000 1100 Identify the equilibrium price, quantity, consumer and producer surplus and show them on a graph. The graph should be pretty simple here, the main issue is finding the numbers for consumer and producer surplus.arrow_forwardAt 10 million hours, what areas make up the total economic surplus in this market?arrow_forward
- For cach of the scenarios, calculate the surplus and indicate if it is a producer surplus or a consumer surplus. Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off which she found online. She selects and purchases a $35 pair of jeans which cost $35 pre-discount. Roy is willing to pay $2.50 for a sports drink. He puts $5.00 into the vending machine and pushes the button for the sports drink without noticing that the price has increased to $2.75 until he counts the change he gets back. Roy has a Roy's surplus: $ producer surplus. consumer surplus.arrow_forward1. Consider the market for cell phones in Celltown. Suppose that the inverse demand curve is P = -2Qd + 300 and that the inverse supply curve is P = 3Qs + 50. a. Sketch the inverse supply and inverse demand curves. b. Calculate the equilibrium price and quantity. c. Compute consumer surplus (CS), producer surplus (PS), and total surplus. d. Suppose the Mayor of Celltown institutes a price floor of P = $250 in order to promote the new technology. It is illegal to sell cell phones at a price below P. What is the quantity transacted in the market with the price floor? e. Compute the change in CS and the change in PS. f. Compute the change in total surplus. If you were an economic advisor to the Mayor whose goal is to maximize the total surplus of the city, would you advise continuing the policy or not? Explain. g. A representative of the Association of Cell Phone Manufacturers arrives at the Mayor's office to lobby against eliminating the price floor. i. Explain why economic theory…arrow_forward6. What would happen to the market if the price ceiling was set above the equilibrium?arrow_forward
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