ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Suppose that Deon places a $150 value on a new MP-3 player, and Juanita places a $140 value on it. The cost of the MP-3 player is $130. Suppose the government levies a $15 tax on MP-3 players, which raises the price to $145. What is the deadweight loss created by the tax? Answer:arrow_forwardExplain it correctly.arrow_forwardConsider the attached graph showing the supply and demand for rental apartments around the UH. campus. If the government were to subsidize housing by $1000 per unit per month, then the quantity of rental apartments would____ (increase or decrease) by____ thousand units. The rental price received by landlords inclusive of the subsidy would ____(increase or decrease) by_____ dollars per month while the price paid by tenants, net of the subsidy, would____ (increase or decrease) by____ dollars per montharrow_forward
- Look at the tables below. Person Bob Barb Bill Bart Brent Betty $ Maximum Price Willing to Pay $17 14 13 12 11 10 Person Carlos Courtney Chuck Cindy Craig Chad Instructions: Enter your answers as a whole number. a. What is the total surplus if Bob buys a unit from Carlos? $ b. What is the total surplus if Barb buys a unit from Courtney? $ c. What is the total surplus if Bob buys a unit from Chad? Minimum Acceptable Price $6 7 8 9 10 11 d. If you match up pairs of buyers and sellers so as to maximize the total surplus of all transactions, what is the largest total surplus that can be achieved?arrow_forwardWhich of the following would lead to the creation of some consumer surplus? Sam refuses to pay $10 for a haircut because it is only worth $8 to him. Fred buys a car for $4000, the maximum amount that he is willing to pay. Danette pays $30 a month for phone service, but it is worth $70 a month to her. When Florence purchases a candy bar for 50 cents, she uses a $20 bill to pay for it.arrow_forwardSuppose we instead tax the consumer rather than the driver. What happens in new equilibrium compared to when the driver pays the tax? A B Consumers pay more, cab owners earn more Consumers pay more, cab owners earn the same Consumers pay the same, cab owners earn the same Consumers pay less, cab owners pay the same Fare (per ride) Excise tax -$2 per ride $7.00 6.00 5.00 4.00 3.00 0 11 Supply curve shifts upword by the amount of the tax 6 d 8 S₂ 12 S₁ 10 14 Quantity of rides (millions per year)arrow_forward
- Identify at least one positive externality from running a donut shop. Identify at least one negative externality from running a donut shop. Explain how these positive and negative externalities could impact the donut shop’s profits. (Hint: think subsidy for positive externality and tax for negative externality.) Draw two graphs that show the price of donuts before and after the positive and negative externality impacted the price of your donuts.arrow_forwardThe equilibrium price of peaches is $3.00 per pound before taxes. Then the government decides to levy a $1 per pound tax on peaches which pushes up the price of peaches to $3.65 per pound. The incidence of the tax is is paid by producers. is paid by consumers and Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $0.65; $0.35 $0.65; $0.65 $0; $1.00 d $0.35; $0.65arrow_forwardBetty is willing to pay up to $150 for a particular pair of boots. She is able to buy the boots for $120. The marginal cost of producing the boots is $60. How large is the total economic surplus associated with her purchase of the boots?arrow_forward
- In the immediate aftermath of Hurricane Katrina, a surge in demand for drinking water caused the price of bottled water to rise above $5 per bottle. Supporters of price ceilings on bottled water after a natural disaster a that: argue bottled water is inelastically supplied. the market equilibrium is more fair to low-income families. without the ceiling, the market would produce a surplus of water. the price ceiling eliminates the shortage of water.arrow_forwardThe cookie demand curve slopes downward. When the price of cookies is $ 2, the quantity demanded is 100. If the price increases to $ 3, what happens to the consumer surplus?arrow_forwardRyan would be willing to pay $1 for a lollipop. Sarah would be willing to pay $0.50. The price of the lollipop is $0.75. What is Ryan and Sarah's combined consumer surplus? a. $0 b. $0.25 c. $0.50 d. $0.75 Can someone please explain to me why the correct answer here is $0.25? I did the calculations and i keep getting $0 the follwing is my calculationsarrow_forward
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