Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 4, Problem 1WNG
To determine
The
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Students have asked these similar questions
Use the data and graph below to complete the following.
Plot the data points onto the graph. Use all necessary labels.
Suppose Miley Cyrus only charges $60 per ticket. Draw this price ceiling on the graph
What is the equilibrium price and quantity in this market?
Price:# # $#
Quantity:
If the price Miley Cyrus charges for each ticket is below equilibrium, why doesn’t she raise her prices?
The Ministry of Misallocation has decreed that the production of widgets must be 7000 each month and the production of
gizmos must be 4000 each month. Calculate the deadweight loss in each market caused by these restrictions. Please note
the scale of the quantity axis is in thousands.
Price of widgets
$10
9
8
7
6
5
4
3
2
1
Price of gizmos
$100
90
Supply
Supply
80
70
60
50
40
30
Demand
Demand
20
10
0
012345678910
Quantity of widgets (in thousands)
What is the deadweight loss in the widgets market?
What is the deadweight loss in the gizmos market?
2 4 6 8 10 12 14 16 18 20
Quantity of gizmos (in thousands)
The table below sets out the demand and supply schedules for college meals.
Price
(dollars per
meal)
4
5
6
7
8
Quantity
demanded
(meals per week)
3,000
2,750
2,500
2,250
Quantity
supplied
2,000
1,500
2,000
2,500
3,000
3,500
If the college put a price ceiling on meals at $7 a meal, what is the price students pay
for a meal? How many meals do they buy?
The price of a meal is $6 per meal and students buy 2,500 meals per week.
The price of a meal is $5 per meal and students buy 2,750 meals per week.
The price of a meal is $8 per meal and students buy 2,000 meals per week.
The price of a meal is $7 per meal and students buy 2,250 meals per week.
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- How does an effective price ceiling affect the quantity demanded and the quantity supplied in a competitive market? Provide an example.arrow_forwardUse the following supply and demand schedules for skate boards in table 18.1, to answer the questionsbelow. Table 18.1 Price ($) Quantity Demanded Quantity Supplied 300 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 What will be the result of a price ceiling of $400 on skate boards?arrow_forwardbased on the Application “Venezuela Price Ceilings and Shortages,” use two figures to show the effects of Venezuela’s price control on corn flour in Venezuela and in Colombia’s corn flour marketsarrow_forward
- Suppose the government sets a price ceiling above the equilibrium price for milk. Which of the following will be the result?arrow_forwardThe Ministry of Misallocation has decreed that the production of widgets must be 2000 each month and the production of gizmos must be 14000 each month Calculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands Price of widgets Price of gizmos $10 $100 90 80 70 60 50 9 8 4 3 2 T 0 Supply Demand 1 2 3 4 5 6 7 8 9 10 Quantity of widgets (in thousands) A4,000 in widgets and 180,000 in giamos O88,000 in widgets and 160,000 in gizmos OC 16,000 in widgets and 300,000 in gizmos OD.16,000 in widgets and 320,000 in gizmos OE4,000 in widgets and 360,000 in gizmos 8 8 8 8 8 40 30 20 10 0 Supply Demand 2 4 6 8 10 12 14 16 18 20 Quantity of gizmos (in thousands)arrow_forwardSuppose that the United States and the European Union impose a price ceiling on crude oil of $25 per barrel. Explain, and illustrate graphically, how this would affect the markets for crude oil and for gasoline in the United States and in the European Union.arrow_forward
- Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions What is the original equilibrium price and quantity? What is the equilibrium price and quantity after the Middle East war begins (S2)? If the price ceiling is imposed, what will occur? A surplus or shortage? Are consumers better off with the price ceiling than without it? Explain. How are suppliers affected?arrow_forwardSuppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions What are the original equilibrium price and quantity? What is the equilibrium price and quantity after the Middle East war begins (S2)? If the price ceiling is imposed, what will occur? A surplus or shortage? Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions 2a – 2d. How are suppliers affected?arrow_forwardThe figure illustrates the market for apples in which the government has imposed a price floor of $12 per crate. How many crates of apples will be sold after the price floor has been imposed? million crates of apples per year. (Enter your response as an integer.) Will there be a shortage or surplus? If there is a shortage or surplus, how large will it be? million crates of apples There will be a of per year. (Enter your response as an integer.) Will apple producers benefit from the price floor? O A. Apple producers who are able to sell their apples at the $12 price per crate will benefit. B. Apple producers who are not able to sell their apples will not benefit. OC. Total revenue for apple producers as a group will decrease from $220 million to $216 million. D. Both a and b. E. All of the above. Price 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 4 Supply Demand 8 12 16 20 24 28 32 36 Quantity (millions of crates per year) 40arrow_forward
- please plot a graph showing the effect of a government subsidy on the market for surgical masks.arrow_forwardSuppose the equilibrium price for soccer tickets in a free market results in 15,000 tickets being purchased. Major League Soccer has decided to impose a price control of $19 per ticket. At a price of $19, soccer teams would be willing to supply 11000 tickets. At this price, consumers are willing to purchase 25500 tickets. Which of the following is a result of the price control?There will be a __ of ___ ticketsarrow_forwardBelow, you are provided with the demand and supply schedules for jars of peanut butter. You will use this information to analyze the effect of a price ceiling on the price of a jar of peanut butter, and to identify whether the price ceiling leads to a shortage or a surplus of peanut butter. Price Jars of Peanut Butter Demanded Jars of Peanut Butter Supplied $2.00 2,500 1,000 $2.50 2,250 1,250 $3.00 2,000 1,500 $3.50 1,750 1,750 $4.00 1,500 2,000 Part 7 : Suppose that the government imposes a price ceiling of $4.00 per jar of…arrow_forward
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