Q1. A market is characterized by the demand function is given by Qu= 1,080 – 3P and the supply function Q.= 6P – 360 respectively. (c) The government now establishes a $60 subsidy for buyers every time they purchase a unit of the good. How much tax-payer money will the government spend to support this policy? What is the size of the deadweight loss generated by the subsidy? (d) Firms can now export at an international price of $240 per unit. How many units are exported? How much are the gains from trade?
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- 2. Using the following graph, answer the following questions. Also, show/Label your answers for parts a-e on the graph as well. Price 20 18 16 14 12 10 6. 4 6 8 10 12 14 16 Quantity 2 a. Suppose a $4 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed? b. Suppose a $4 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?Suppose that the demand curve for wheat is and the supply curve is QD = 400 - 40p Consumer surplus Qs = 40p. The government provides producers with a specific subsidy of s = $2 per unit. How do the equilibrium price and quantity change? The equilibrium price decreases by $1 and the equilibrium quantity increases by $40 units. (Enter numeric responses using real numbers rounded to two decimal places.) Wh effe does this tax (subsidy) have on consumer surplus, producer surplus, government revenue, welfare, and deadweight lo by $.Don't use chatgpt and make sure you include the graphs needed (a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay?(b) Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? (c) If you were a policymaker and wanted to promote a fat tax in the UK, whatwould you cover in your policy campaign?
- (a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).(a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay? Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? Please do not use chat gpt and answer the best way it can be.1. The government wishes to encourage students to become more literate in economics and is therefore giving a S10 per unit subsidy to the purchasers of microeconomics textbooks. Given the following demand and supply, what are the economic effects of this subsidy? Illustrate with a diagram. Show work. P= 100 - Qa P= 20 + 3Q. (1) (2) Original Price Original Output New Price Consumer Pays New Output New Price Producer Receives Benefit to consumer Benefit to producer Cost to government
- Suppose demand and supply are given by? = 500-2P and ? =-100+3Pa) Which function is the demand function and why?b) Compute the equilibrium price and quantity in this market?c) Compute the consumer surplus and producer surplus.d) Suppose a GHC 1 exercise tax is imposed on the good. Determine the new equilibrium price and quantity.e) Compute the tax revenue to the government. f) Compute the deadweight loss resulting from the tax.2. The demand and supply functions of a gcod are given by P = -Qd + 125, 2P = 3Qs + 30. Determine the equilibrium price and quantity. Determine ako the effect on the market equilibrium if the govemment decides to impose a fixed tax of GHC5 on each good Who pays the tax? (p = 81, q = 44, then p = 83, q = 42) 3. If fixed costs are 18, variable costs per unit are 4, and the demand function is P = 24 - 2Q. Obtain an expression for n in terms of Q and hence sketch a graph of n against Q. a) For what values of Q does the firm break even? (q = 1 or 9) b) What is the maximum profi? (n = 32 at q = 5) 4. Given the supply and demand functions P = Q? + 12Q, + 32, P = -Qå - 4Qa + 200, Calculate the equilibrium price and quantiy. (p = 140, q = 6)The demand and supply equations for a product are: Q^d=300-6p and Q^x=-40+6p. . Determine the market Equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graph and explain . Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss
- Figure 8-10 PO Pl P2 P3 P4 PS P6 D7 PO Price P9 0 Q1 Q2 Q3 Q4Q5 a) 1/2 x (P2-P8) x (05-02) Supply D Refer to Figure 8-10. Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2 Without the tax, the total surplus is c) (P2-P8) x Q2 Quantity b) [1/2x (PO-P2) x Q2]+[(P2 PS) x Q2] + [1/2 x (P8-0) x Q2] d) [1/2 x (PO-PS) x Q5] + [1/2 x (P5-0) * Q5].3. Consider a market where the supply and the demand are given by Q (P) = 100P and QP (P)=2000-100P. (a) Find the equilibrium price, quantity, consumer surplus, producer surplus, and the aggregate surplus. (b) Suppose the government wants to raise revenue by imposing tax of Y4 per unit. What is the price producers get, the price consumers pay, the equilibrium quantity, the tax revenue, and the dead weight loss? (c) Suppose the government is thinking about imposing an ad valorem tax instead of per unit tax. What does the tax rate has to be to keep the price consumers pay the same as in the per unit tax case? (d) Which tax scheme is better for the economy? Why?3. In the market for Samsung Galaxy S22, the demand function is Q = 200 - 2P, while the supply function is Q = 2P - 20, where P denotes the price, and Q the quantity of Samsung Galaxy S22. a. Calculate the equilibrium price and quantity! b. To reduce addiction to social media, the government imposes a specific tax of $5 on sellers. Calculate the new equilibrium price and quantity c. Now suppose the tax of $5 is imposed on buyers rather than sellers. Find the new equilibrium price and quantity.