Exam 3: Using Supply and Demand to Analyze Markets

To calculate consumer surplus for the case when a quota is in place:

Use the following to answer question: Figure 3.25 -(Figure 3.25) Refer to Figure 3.25 to answer the following questions:

The demand and supply of pickles are given by Q^D = 300 - 500P and Q^S = 400P - 150, where P is the price per pickle and Q measures the quantity of pickles in millions. Suppose the government creates a subsidy of $0.25 per pickle. Which of the following statements are TRUE?

The supply and demand for organic peanut butter are Q^D = 70 - 5P and Q^S = 5P, where P is price per jar and Q is in hundreds of jars per day. The government decides to impose either a $1 supply subsidy or a price floor equal to $7.50. The producer surplus associated with the price floor would be _____. (Round your answer to the nearest cent.)

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. a. Calculate the equilibrium price and quantity. b. Calculate the consumer surplus at the equilibrium price.

Tavist allergy pills sell for $25 a box. Steve, Brian, and Toby are willing to pay $33, $27, and $19, respectively, for a box of Tavist. What is the total consumer surplus for Steve, Brian, and Toby?

To calculate deadweight loss:

Use the following to answer question: Figure 3.13 -(Figure 3.13) The supply of private golf courses is S_{private golf} and the supply of private and public golf courses is S_total. The government provision of public golf courses reduced the number of rounds per week played on private golf courses by:

The market for cigars is characterized by Q^D = 10 - 0.25P and Q^S = 0.15P, where P is price per box of cigars and Q measures boxes per hour.

Use the following to answer question: Figure 3.22 -(Figure 3.22) Suppose the government sets a price ceiling of $10.

Use the following to answer question: Figure 3.15 -(Figure 3.15) Which of the following statements is (are) TRUE?

Use the following to answer questions 35-36: Figure 3.12 -(Figure 3.12) The quota causes consumer surplus to:

Which of the following supply curves (where P is price per bushel and Q^S measures number of bushels) generates $64 of producer surplus at a market price of $10 per bushel?

Use the following to answer question: Figure 3.20 -(Figure 3.20) Refer to Figure 3.20 to answer the following questions:

If the government quit subsidizing a product, consumer surplus would _____ and producer surplus would _____.

Use the following to answer questions 11-12: Figure 3.4 -(Figure 3.4) The outward shift of the supply curve will cause consumer surplus to increase from area _____ to area _____.

Use the following to answer questions 20-21: Figure 3.7 -(Figure 3.7) At a price ceiling of $8, there is a shortage of _____ and a deadweight loss of _____.

Justin purchased a Polar Express train set from Lionel Trains. He paid $240 for the set and received consumer surplus of $125. What was Justin's willingness to pay for the train set?

Use the following to answer question: Figure 3.23 -(Figure 3.23) Use Figure 3.23 to answer the following questions:

Suppose that the demand curve for an advanced technology product for businesses is given by and supply is . a. Find the equilibrium price and quantity. b. Calculate consumer surplus at the equilibrium price. c. Calculate producer surplus at the equilibrium price.