ECON 1116 Chapter Notes - Chapter 5: Taxicabs Of The United States, Price Ceiling, Deadweight Loss
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Who bears the primary costs of a rent control program?
A. | landlords | |||||||||||||
B. | renters that get rent-controlled apartments | |||||||||||||
C. | taxpayers | |||||||||||||
D. | the wealthy Assume the demand for sushi is Qd = 180 - 3P, where Qd is quantity demanded and P = price in dollars. The supply of sushi is Qs = 80 + 5P, where Qs is quantity supplied (and P is, again, price in dollars). A price of $20 would result in:
|
US agricultural price supports are politically popular because
A. | They have no adverse impacts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | The US would have food shortages without them | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | The benefits accrue to a large number of voters and the costs are paid by a small number of voters | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. | The costs are spread out among millions of people Assume the demand for sushi is Qd = 180 - 3P, where Qd is quantity demanded and P = price in dollars. The supply of sushi is Qs = 80 + 5P, where Qs is quantity supplied (and P is, again, price in dollars). What would be the equilibrium price?
Price floors and ceiling prices:
|
Price/Feeder |
Quantity Demanded |
Quantity Supplied |
$300 |
500 |
1800 |
270 |
600 |
1700 |
240 |
700 |
1600 |
210 |
800 |
1500 |
180 |
1000 |
1400 |
150 |
1100 |
1300 |
120 |
1200 |
1200 |
90 |
1300 |
1100 |
60 |
1400 |
1000 |
30 |
1500 |
900 |
10 |
1600 |
800 |
Ā | Ā | Ā |
Your client has asked that you develop a report addressing the following questions so that you can present these findings to their Board of Directors:
Questions:
- Construct a graph showing supply and demand in the electronic dog feeder market, using Microsoft Excel.
- How are the laws of supply and demand illustrated in this graph? Explain your answers.
- What is are the equilibrium price and quantity in this market?
- Assume that the government imposes a price floor of $180 in the feeder market. What would happen in this market?
- Assume that the price floor is removed and a price ceiling is imposed at $90. What would happen in this market?
- Now, assume that the price of feeders drops by 50%. How would this change impact the demand for feeders? Explain your answer and reconstruct the graph developed in question one to show this change.
- Assume that incomes of the consumers in this market increases. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
- Assume that the number of sellers decreases in this market. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
- Explain the difference between a normal good and an inferior good. Would your answers to question 7 change depending on whether this good is normal or inferior? depending on whether this good is normal or inferiorly?