Question 1

Figure 9.7
-Refer to Figure 9.7.After the policy was implemented,the quantity traded became

Accepted Answer

The policy created a price floor of $5, which means producers cannot sell their products below this price. At this price, the quantity demanded is 2000, while the quantity supplied is 4000. Therefore, the quantity traded is the smaller of these two quantities, which is 2000.

Question 2

A price support may be pictured by

Accepted Answer

EPrice supports can be visualized in two ways: A) by shifting the demand curve to the right, which reflects an increase in demand due to government purchases, and E) by drawing a horizontal line at the supported price level, which indicates the minimum price at which the product will be sold, regardless of the market equilibrium.

Question 3

Figure 9.7
-Refer to Figure 9.7.Before the policy was implemented,producer surplus was

Accepted Answer

The answer of  Figure 9.7
-Refer to Figure 9.7.Before the...

Question 4

Figure 9.6
-Refer to Figure 9.6.Before this policy was implemented,producer surplus was

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.Before this...

Question 5

Figure 9.6
-Refer to Figure 9.6.As a result of this policy,producer surplus will be

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.As a...

Question 6

What is the difference between a price support and a price floor?

Accepted Answer

A price support involves government intervention to maintain a minimum price by buying up excess supply, whereas a price floor is a legally established minimum price above which the market price cannot fall, but does not necessarily involve government purchase of excess supply.

Question 7

Figure 9.6
-Refer to Figure 9.6.As a result of this policy,consumer surplus will

Accepted Answer

The policy results in a decrease in quantity demanded from 100 to 50. At a price of $50, the new consumer surplus is the area of the triangle below the demand curve and above the new price, which is (1/2)(50-25)(100-50) = $1250. Thus, consumer surplus falls from the original level of $3500 to $2250.

Question 8

Figure 9.6
-Refer to Figure 9.6.The amount the government pays in the market to implement this policy is

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.The amount...

Question 9

When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price,the impact on total welfare is the

Accepted Answer

The price support program creates a price floor above the equilibrium price, causing a surplus of the good. The government then purchases the surplus at the support price, incurring a cost. The change in consumer surplus and producer surplus can be calculated by comparing the equilibrium outcome to the new outcome with the price support program. Therefore, the change in consumer surplus + the change in producer surplus - the cost to government is the correct measure of total welfare.

Question 10

Figure 9.7
-The policy shown in Figure 9.7 is a

Accepted Answer

The answer of  Figure 9.7
-The policy shown in Figure...

Question 11

A country's government would like to raise the price of one its most important agricultural crops,coffee beans.Which of the following government programs will result in higher prices for coffee beans?

Accepted Answer

All of the options listed would contribute to raising the price of coffee beans. An import quota (A) limits the quantity of coffee beans that can be imported, reducing supply. An acreage limitation program (B) reduces the amount of coffee beans produced domestically by incentivizing farmers to leave some of their land idle, also reducing supply. An import tariff (C) increases the cost of imported coffee beans, making them more expensive and potentially reducing their supply in the domestic market. All these measures reduce the overall supply of coffee beans in the market, which, according to the law of supply and demand, would lead to higher prices.

Question 12

Figure 9.6
-Refer to Figure 9.6.As a result of this policy,quantity will

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.As a...

Question 13

Figure 9.6
-Refer to Figure 9.6.Including the consumers' expected tax burden,the total change in welfare from this policy is

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.Including the...

Question 14

Figure 9.7
-Refer to Figure 9.7.After the policy,consumer surplus became

Accepted Answer

The answer of  Figure 9.7
-Refer to Figure 9.7.After the...

Question 15

Figure 9.7
-Refer to Figure 9.7.Before the policy was implemented,consumer surplus was

Accepted Answer

The answer of  Figure 9.7
-Refer to Figure 9.7.Before the...

Question 16

Figure 9.6
-Refer to Figure 9.6.Before this policy was implemented,consumer surplus was

Accepted Answer

Before the policy was implemented, the equilibrium quantity was 400 and the equilibrium price was $50. This means that consumer surplus was the area of the triangle formed by the demand curve, the price line ($50), and the vertical axis, which is (1/2)(400)($50 - $20) = $4000. After the policy is implemented, the new equilibrium quantity is 300 and the new equilibrium price is $70. This means that consumer surplus is the area of the triangle formed by the demand curve, the price line ($70), and the vertical axis, which is (1/2)(300)($70 - $20) = $9000. Thus, the increase in consumer surplus is $9000 - $4000 = $5000.

Question 17

When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price,changes in producer surplus

Accepted Answer

Price support programs typically increase producer surplus because producers receive a guaranteed price for their goods, often above the market equilibrium price. However, this comes at a cost to consumers, who pay higher prices, and the government, which incurs expenses purchasing and storing the surplus goods. The overall effect is that the gains to producers are more than offset by the losses to consumers and the cost to the government.

Question 18

Figure 9.7
-Refer to Figure 9.7.After the policy was implemented,price became

Accepted Answer

After the implementation of the policy, the market moved from point A to point B on the demand curve, where the quantity demanded is 3000. At point B, the corresponding price is $50. Therefore, the price became $50 after the policy was implemented.

Question 19

Figure 9.6
-Refer to Figure 9.6.The government policy pictured is

Accepted Answer

The answer of  Figure 9.6
-Refer to Figure 9.6.The government...

Question 20

Which of the following is unlikely to occur as a result of a price support program?

Accepted Answer

The answer of Which of the following is unlikely to...

Quiz 9: The Analysis of Competitive Markets

Figure 9.7 -Refer to Figure 9.7.After the policy was implemented,the quantity traded became

A price support may be pictured by

Figure 9.7 -Refer to Figure 9.7.Before the policy was implemented,producer surplus was

Figure 9.6 -Refer to Figure 9.6.Before this policy was implemented,producer surplus was

Figure 9.6 -Refer to Figure 9.6.As a result of this policy,producer surplus will be

What is the difference between a price support and a price floor?

Figure 9.6 -Refer to Figure 9.6.As a result of this policy,consumer surplus will

Figure 9.6 -Refer to Figure 9.6.The amount the government pays in the market to implement this policy is

When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price,the impact on total welfare is the

Figure 9.7 -The policy shown in Figure 9.7 is a

A country's government would like to raise the price of one its most important agricultural crops,coffee beans.Which of the following government programs will result in higher prices for coffee beans?

Figure 9.6 -Refer to Figure 9.6.As a result of this policy,quantity will

Figure 9.6 -Refer to Figure 9.6.Including the consumers' expected tax burden,the total change in welfare from this policy is

Figure 9.7 -Refer to Figure 9.7.After the policy,consumer surplus became

Figure 9.7 -Refer to Figure 9.7.Before the policy was implemented,consumer surplus was

Figure 9.6 -Refer to Figure 9.6.Before this policy was implemented,consumer surplus was

When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price,changes in producer surplus

Figure 9.7 -Refer to Figure 9.7.After the policy was implemented,price became

Figure 9.6 -Refer to Figure 9.6.The government policy pictured is

Which of the following is unlikely to occur as a result of a price support program?