Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 4, Problem 13SQ
To determine
The impact of floor
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Students have asked these similar questions
A). Draw the supply and demand curves for the market of specific good.
B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the
government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected
by that decision.
C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the
government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected
by that decision.
a. If a producer tries to sell oranges at a price of $0.50 per pound, what will be the quantity demanded and quantity supplied at this price?
b. Determine whether there is a surplus or a shortage at a price of $0.50 per pound, and determine the size of the surplus or shortage.
At this price, there will be a
This is the market for HOT CHOCOLATE, which is a normal good and is
produced with cocoa beans. We know that hot tea is a substitute for hot
chocolate and whipped cream is a complement.
Quantity
Surplus or
Price
Quantity Supplied
Demanded
Shortage
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000
1. Complete the table above finding a Shortage or a Surplus. Draw a graphical
illustration of the market and find the equilibrium price and equilibrium quantity.
For the remaining questions, explain by words or show graphically how
equilibrium price and equilibrium quantity of hot chocolate would change (due
to changes in Supply or Demand) if:
2. The price of cocoa beans falls;
3. The price of tea falls;
4. Consumer income falls because of a recession.
Chapter 4 Solutions
Economics For Today
Ch. 4.2 - Prob. 1YTECh. 4.2 - Prob. 2YTECh. 4.2 - Prob. 3YTECh. 4.2 - Prob. 4YTECh. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQP
Ch. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQPCh. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 16SQCh. 4 - Prob. 17SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQCh. 4 - Prob. 20SQ
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- Use the graph below to answer the following questions: Price $15 Supply $14 $13 $12 $11 $10 Demand 25 75 125 175 225 275 Quantityarrow_forwardRefer to the graph below. A $6.95 B) $3.25 C) $4.45 D) $4.85 E $5.45 F) $4.95 PRICE Select the possible prices that buyers would pay if a $2 tax were added to this market. G) $6.85 5 3 Demand 60 100 QUANTITY Supplyarrow_forward1. The market for pairs of sneakers is described by the following supply and demand curves: Qd = 350-P; Qs = 3P-50. a) Solve for the equilibrium price and quantity. b) If the government imposes a price ceiling of $90, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and the size of the shortage or surplus? c) If the government imposes a price floor of $90, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and the size of the shortage or surplus? d) Instead of a price control, the government levies a tax on produces of $20. As a result, the new supply curve is: Qs = 3(P-0)-50. Does a shortage or surplus (or neither) develop? What is the price the buyer pays, the price the seller receives, quantity supplied, quantity demanded, and the size of the shortage or surplus?arrow_forward
- Suppose that the government imposed a price ceiling on cows. Would you expect theprice of steak to increase, decrease, or stay the same? Explain your answer.arrow_forwardWhen the quantity demanded of a goods is equal to the quantity supplied of the goods, then-___ what is the correct answer? Is it the government is intervening in the market? There is a surplus. There is a shortage. None of themarrow_forwardAt 8 million hours, what areas make up the total economic surplus in this market?arrow_forward
- Suppose the market demand for organic grass-fed beef is given by Q=100-2P and the supply is given by Q= P/2 (quantity is given in thousand pounds). A) Find the equilibrium price of a pound of beef and the equilibrium quantity. B) Find the consumer surplus (CS) and producer surplus (PS) at the market equilibrium point. C) How will the equilibrium change if the government imposes a price ceiling of $20/pound? D) Show this market with the price ceiling in a supply and demand graph. E) Consider that the consumers who bought the beef at $20/pound are the ones with the highest willingness to pay (scenario 1), what is the new consumer surplus (CSnew) and the new producer surplus (PSnew)? F) What is the deadweight loss (DWL) after the price ceiling in scenario 1? G) What would happen in this market if, instead, the consumers who bought the beef were the ones with the lowest willingness to pay (scenario 2)? (Hint: You don’t have to show it mathematically, or graphically, but write…arrow_forwardPrice per unit ($) The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market. 10 00 When price equals $8, a surplus occurs. 9.00- 1.) Using the line drawing tool, draw a horizontal line from the $8 value on the vertical axis to represent the surplus Label this line 8.00- "Price 7.00- 2) Using the point drawing tool, locate quantity demanded (label the point P,) and quantity supplied (label the point P,) at this price of $8 6.00- Carefully follow the instructions above and only draw the required objects. 5.00 4.00- 3.00- 2.00 1.00- onal 0.00- 10 70 80 Quantity per unit of time 20 30 40 50 60 90 100arrow_forwardTax sellersarrow_forward
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