Exam 3: Using Supply and Demand to Analyze Markets

The supply and demand for 9-volt batteries are given by Q^D = 230 - 10P and Q^S = 30P - 10, where P is the price per four-pack and Q measures the number of four-packs.

The supply curve for pizza on the local college campus is represented by Q^S = -2,500 + 210P. At a price of $14, the total producer surplus for the college campus would be $_____.

In the market for used cars, the demand and supply equations are given by Q^D = 12,000 - 0.4P and Q^S = 0.1P + 5,000, where P is the price per car and Q measures the quantity of cars. What is the size of the deadweight loss at a price floor of $15,000?

The supply and demand for solar panels are given by Q^S = 5P - 5,000 and Q^D = 15,000 - 5P, where P is price per solar panel and Q measures the quantity of solar panels. Suppose the government provides a $500 subsidy per solar panel.

If the legal burden of a tax is passed from sellers to buyers:

Use the following to answer question: Figure 3.21 -(Figure 3.21) Refer to Figure 3.21 to answer the following questions:

The demand curve for pizza on the college campus is represented by Q^D = 1,000 - 40P. At a price of $14, the total consumer surplus for the college campus would be $_____.

The demand and supply of ethanol are given by Q^D = 8,000 - 2,000P and Q^S = 1,000P - 1,000, where P is price per gallon and Q measures gallons per minute. If the government subsidizes ethanol at $0.30 per gallon, what is the deadweight loss?

Suppose that a minimum price (price floor) is legislated. To calculate producer surplus:

The demand and supply curves for a product are Q^D = 50 - 0.5P and Q^S = 2.5P + 5, where P is the price per unit and Q measures millions of units. If the government levies a $1.20 per unit tax on buyers, what is the size of the deadweight loss?

Suppose that a local government has imposed a quota of 0.5 million gallons on water usage. Before the quota is enforced, the market demand curve is: Q^D = 10 - 2.25P and the market supply curve is: Q^S = -10 + 2.75P where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons.

The market for cookies is represented by the following supply and demand conditions: Q^D = 1,000 - 200P and Q^S = 400P - 200, where P is price per box of cookies and Q measures boxes per day.

Suppose the demand and supply curves for units of university credits are given by the following equations: Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price charged for each unit in dollars. Suppose that the government wants to make education more accessible and therefore passes a regulation that says no university can charge more than $1,000 per credit. Calculate the deadweight loss associated with this price ceiling.

Suppose the demand and supply curves for units of university credits are given by the following equations: Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

Suppose that technological breakthroughs make jet packs affordable, convenient, and safe for personal transportation. The demand for automobiles would become _____ the consumer surplus from automobiles.

Nancy paid $55 for car mats but was willing to pay $80. What is Nancy's consumer surplus?

Explain why taxes cause deadweight losses.

The market for plywood is characterized by the following demand and supply equations: Q^D = 800 - 10P and Q^S = 50P - 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. If the government imposes a price ceiling of $25 per sheet of plywood, producer surplus:

Use the following to answer question: Figure 3.24 -(Figure 3.24) In Figure 3.24, S_priv represents the supply of health care visits at private clinics and S_total represents the total supply of health care visits at private and government-operated clinics.

Use the following to answer question: Figure 3.26 -(Figure 3.26) Use Figure 3.26 to answer the following questions.