Question 1

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$. Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the deadweight loss resulting from the subsidy?
A)0, subsidies do not have a deadweight loss
B)2.5
C)5
D)7.5

Accepted Answer

The deadweight loss is the area of the triangle formed by the difference between the equilibrium price with and without the subsidy. The equilibrium price without the subsidy is $P = 5 + 3 Q ^ { s }$ and the equilibrium price with the subsidy is $P = 50 - 2 Q ^ { d } - 5$. The equilibrium quantity without the subsidy is $Q ^ { s } = 10$ and the equilibrium quantity with the subsidy is $Q ^ { d } = 20$. The deadweight loss is therefore:$$\frac{1}{2} \times (P^* - P) \times (Q^* - Q) = \frac{1}{2} \times (50 - 2 \times 20 - 5 - 5) \times (20 - 10) = 2.5$$

Question 2

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$. Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What are the equilibrium price and quantity traded before the subsidy?
A) $P = 30 ; Q = 10$
B) $P = 25 ; Q = 12.5$
C) $P = 32 ; Q = 9$
D) $P = 35 ; Q = 7.5$

Accepted Answer

Before the subsidy, the equilibrium price and quantity traded can be found by setting the inverse supply equal to the inverse demand:

$$5 + 3Q^s = 50 - 2Q^d$$

Solving for Q gives:

$$Q = 9$$

Substituting this value of Q back into either inverse supply or inverse demand gives the equilibrium price:

$$P = 5 + 3Q^s = 32$$

Therefore, the equilibrium price and quantity traded before the subsidy are $P = 32$ and $Q = 9$. Before the subsidy, we set the supply and demand equations equal to each other:
\begin{align*}
5+3Q_s = 50-2Q_d\
3Q_s + 2Q_d = 45
\end{align*}
At equilibrium, the quantity supplied equals the quantity demanded, so we can substitute $Q_s=Q_d$:
\begin{align*}
5Q = 45\
Q = 9
\end{align*}
Substituting $Q=9$ into either the supply or demand equation gives the equilibrium price:
\begin{align*}
P = 5+3(9) = 32
\end{align*}
After the subsidy, the market supply curve shifts down by \$5, becoming:
\begin{align*}
P = 10 + 3Q_s
\end{align*}
We set this new supply curve equal to the original demand curve:
\begin{align*}
10 + 3Q_s &= 50 - 2Q_d\
3Q_s + 2Q_d &= 40
\end{align*}
Substituting $Q_s=Q_d$, we get:
\begin{align*}
5Q &= 40\
Q &= 8
\end{align*}
Substituting $Q=8$ into either the supply or demand equation, we get:
\begin{align*}
P &= 5 + 3(8) - 5\
&= 19
\end{align*}
Therefore, the new equilibrium after the subsidy is $(Q,P)=(8,19)$, which means the quantity decreases by 1 and the price decreases by $13$. None of the answer choices match this outcome, so the correct answer is (C) because it gives the equilibrium price and quantity traded before the subsidy.

Question 3

An analysis that determines the equilibrium prices and quantities in more than one market simultaneously is calledL
A)partial equilibrium analysis
B)general equilibrium analysis
C)externality analysis
D)market equilibrium analysis

Accepted Answer

General equilibrium analysis considers multiple markets simultaneously and examines the interactions between them to determine the equilibrium prices and quantities. Partial equilibrium analysis only looks at one market in isolation, while externality analysis focuses specifically on the effects of external factors on market outcomes. Market equilibrium analysis is a more general term that could apply to either partial or general equilibrium analysis. General equilibrium analysis takes into account the interdependence of multiple markets, whereas partial equilibrium analysis only considers the market for a single good or service. Externality analysis focuses on the impact of external costs or benefits on market outcomes, and market equilibrium analysis is a more general term that can refer to both partial and general equilibrium analysis. Therefore, the best choice for an analysis that determines the equilibrium prices and quantities in more than one market simultaneously is general equilibrium analysis.

Question 4

If supply is relatively inelastic when compared with demand in a perfectly competitive market,:
A)consumers will share a larger burden of an excise tax than producers.
B)consumers and producers will share the burden of an excise tax equally.
C)producers will share a larger burden of an excise tax than consumers.
D)the incidence of the tax cannot be determined without more information.

Accepted Answer

When supply is relatively inelastic compared to demand in a perfectly competitive market, it means that producers are unable to increase the quantity of the product even if there is an increase in demand or price. In this scenario, if an excise tax is imposed, producers will not be able to absorb the additional cost and will pass it on to consumers by raising the price of the product. As a result, consumers will end up paying a higher price and bear a part of the tax burden, but since supply is relatively inelastic, producers will also bear a significant portion of the tax burden. However, producers may shift a larger portion of the tax burden if the demand for the product is very strong and consumers are willing to pay a higher price for it.

Question 5

The incidence of a tax depends on:
A)whom the tax is levied upon.
B)the relative elasticities of supply and demand.
C)the elasticity of government revenues.
D)the income elasticity of demand for the product.

Accepted Answer

The incidence of a tax depends on the relative elasticities of supply and demand. If the demand is more elastic than the supply, the burden of the tax falls on the producer, and if the supply is more elastic than demand, the burden falls on the consumer. The other options are not directly related to the incidence of a tax. The incidence of a tax depends on the relative elasticities of supply and demand. When demand is more elastic than supply, consumers are able to shift the burden of the tax onto producers, and vice versa if supply is more elastic than demand. The other options are not relevant to the incidence of a tax.

Question 6

If the government decides to subsidize a good, it will typically do all of the following except:
A)add to consumer surplus.
B)add to producer surplus.
C)have a positive impact on the government's budget.
D)create a deadweight loss.

Accepted Answer

Government subsidies typically involve the government providing financial assistance to producers or consumers of a particular good or service. This can help to reduce the cost of producing or purchasing the product, which can lead to an increase in both consumer and producer surplus. However, because the government is effectively providing a form of financial assistance, there may be a cost to the government budget. In other words, the government may have to spend money in order to provide the subsidy, which can have a negative impact on the budget. Therefore, the correct answer is C, which states that a government subsidy will not have a positive impact on the government's budget. The other choices, including A, B, and D, are all possible outcomes of a government subsidy. Subsidies are designed to promote the production and consumption of a particular good, which leads to an increase in consumer and producer surplus. However, subsidies typically have a negative impact on the government's budget since they require the government to spend money to support the subsidy. A deadweight loss may also occur if the subsidized good is not in high demand or if the subsidy leads to overproduction. Therefore, the correct answer is C, because subsidies typically have a negative impact on the government's budget.

Question 7

An analysis that determines the equilibrium prices and quantities in one market holding constant prices in all other markets is called:
A)partial equilibrium analysis
B)general equilibrium analysis
C)externality analysis
D)market equilibrium analysis

Accepted Answer

Partial equilibrium analysis examines the equilibrium prices and quantities in one specific market while assuming prices in all other markets are constant. This approach is useful for analyzing the behavior of individual markets and can help identify market failures or inefficiencies. Partial equilibrium analysis focuses on analyzing one specific market while holding constant the prices in all other markets. This allows for a more focused and detailed understanding of the market in question and is the best choice for determining equilibrium prices and quantities in that market. General equilibrium analysis, on the other hand, considers the interactions between multiple markets and is more complex. Externality analysis focuses on the external effects of economic activities and does not directly relate to determining equilibrium prices and quantities in a market. Market equilibrium analysis is a broad term that can refer to any analysis of market equilibria, but partial equilibrium analysis is the specific type of market equilibrium analysis that is relevant in this context.

Question 8

When a perfectly competitive market is in equilibrium,:
A)consumer and producer surplus are maximized.
B)price is maximized.
C)quantity is maximized.
D)deadweight loss is positive.

Accepted Answer

In a perfectly competitive market equilibrium, both consumer and producer surplus are maximized. This occurs where the supply and demand curves intersect, at the point where the price is equal to the marginal cost of production. At this point, there is no deadweight loss because the market is operating at its most efficient level. In a perfectly competitive market, consumer and producer surplus are maximized at the equilibrium point where marginal cost equals marginal revenue. This is because at this point, the price reflects the value that consumers place on the product and the cost of producing it for the producers. Therefore, any deviation from this point would either result in a decrease in consumer surplus or producer surplus.

Question 9

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$. The initial supply curve is $P = 2 Q ^ { s }$. Suppose that the government imposes a $\$ 3$ tax on this market. What is the change in consumer surplus due to the tax?
A)$450.
B)$420.50.
C)$29.50.
D)$0.50.

Accepted Answer

To find the change in consumer surplus, we need to first find the post-tax equilibrium price and quantity.

After the tax is imposed, the demand curve shifts down by $3, becoming:

$$P = 87 - Q^d$$

The supply curve remains the same:

$$P = 2Q^s$$

At the new equilibrium, the quantity demanded and supplied will be equal:

$$87 - Q^d = 2Q^s$$

Solving for Q, we get:

$$Q = 21$$

Plugging this into either the demand or supply function gives us the post-tax equilibrium price:

$$P = 2 \times 21 = 42$$

The change in consumer surplus is then:

Initial CS - New CS

To find the initial consumer surplus, we can integrate the demand function:

$$\int_0^{90} (90-Q) dQ = 4050$$

To find the new consumer surplus, we need to find the area of the triangle formed by the new equilibrium price (42), the initial equilibrium price (45), and the quantity demanded at both equilibria (Q=15 at the initial equilibrium, Q=21 at the post-tax equilibrium):

$$New CS = \frac{1}{2} (45-42) (15+21) = 29.5$$

Therefore, the change in consumer surplus is:

$$4050 - 29.5 = 4020.5$$

or approximately $29.50. The correct answer is (C).

Question 10

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$. Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the equilibrium quantity traded after imposition of the subsidy?
A) $Q = 10$
B) $Q = 12.5$
C) $Q = 9$
D) $Q = 7.5$

Accepted Answer

The subsidy effectively lowers the supply curve by $5, making it $P = 0 + 3Q^s$. Setting the new supply equal to demand: $0 + 3Q = 50 - 2Q$, solving gives $Q = 10$.

Question 11

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$. The initial supply curve is $P = 2 Q ^ { s }$. Suppose that the government imposes a $\$ 3$ tax on this market. How much of this $\$ 3$ tax is paid by consumers?
A) $\$ 1$.
B) $\$ 1.50$.
C) $\$ 2$.
D) $\$ 3$

Accepted Answer

The answer of Suppose that a market is initially in...

Question 12

In a perfectly competitive market, which of the following will not occur as a result of an excise tax?
A)The market will under-produce relative to the efficient level.
B)Consumer surplus will be higher than with no tax since the tax is imposed on suppliers.
C)Producer surplus will be lower than with no tax.
D)The tax causes a deadweight loss.

Accepted Answer

In a perfectly competitive market, an excise tax will lead to a higher price for consumers and a lower price received by producers. The market will under-produce as a result because the tax increases the cost of production for suppliers. This leads to a deadweight loss, as some mutually beneficial trades no longer occur due to the tax. However, consumer surplus will not be higher than with no tax since the tax will shift the supply curve upward and to the left, leading to a decrease in consumer surplus. In a perfectly competitive market, both consumers and producers are price takers, which means that they have no market power to affect the market price. Therefore, an excise tax on suppliers will shift the supply curve upward by the amount of the tax, which will increase the price paid by consumers and reduce the price received by producers. As a result, the market quantity will decrease, and the market will under-produce relative to the efficient level, causing a deadweight loss.
Consumer surplus will decrease due to the higher price paid, and producer surplus will decrease due to the lower price received. However, the total tax revenue collected by the government may or may not exceed the deadweight loss, depending on the elasticity of demand and supply. Therefore, it is incorrect to say that consumer surplus will be higher than with no tax since the tax is imposed on suppliers.

Question 13

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$. The initial supply curve is $P = 2 Q ^ { s }$. Suppose that the government imposes a $\$ 3$ tax on this market. What are the government receipts from the tax?
A)$90.
B)$87.
C)$45.
D)$43.50.

Accepted Answer

The initial equilibrium is found where the demand curve equals the supply curve: $90 - Q^d = 2Q^s$. Since $Q^d = Q^s = Q$, we can solve for $Q$ to find the equilibrium quantity. This gives us $90 - Q = 2Q$, leading to $3Q = 90$, so $Q = 30$. The tax shifts the supply curve up by $3, making the new supply equation $P = 2Q + 3$. Setting the new supply equal to the original demand, $90 - Q = 2Q + 3$, we find the new equilibrium quantity, $Q = 29$. The government receipts from the tax are the tax amount ($3) times the new quantity sold (29), which equals $87.

Question 14

When a tax is imposed on the producers of a product, which of the following is incorrect?
A)The consumers and producers each bear some part of the burden.
B)If the demand curve is relatively inelastic, the burden borne by consumers increases.
C)If the supply curve is relatively elastic, the burden borne by consumers increases.
D)If the tax is levied on producers, the producers bear the burden of the tax; if the tax is levied on consumers, the consumers bear the burden of the tax.

Accepted Answer

The statement in D is incorrect because regardless of whether a tax is levied on producers or consumers, the economic incidence (or burden) of the tax depends on the relative elasticities of supply and demand, not on who the tax is nominally levied upon.

Question 15

In a perfectly competitive market, which of the following will not occur as a result of a subsidy?
A)The market will overproduce relative to the efficient level.
B)Consumer surplus will be higher than with no subsidy.
C)Producer surplus will be higher than with no subsidy.
D)There will be no deadweight loss from the subsidy.

Accepted Answer

In a perfectly competitive market, a subsidy eliminates the gap between the market price and the cost of production, thereby increasing producer surplus and decreasing consumer surplus. However, since the market is perfectly competitive, the subsidy will lead to an increase in supply, causing the price to fall and the quantity to rise. This increase in production will not cause the market to overproduce relative to the efficient level since this is already achieved in a perfectly competitive market. Additionally, since there are no market distortions, there will be no deadweight loss from the subsidy. Therefore, D is the correct answer. In a perfectly competitive market, a subsidy will not result in a deadweight loss because the subsidy will be fully passed on to consumers in the form of lower prices. Therefore, the market will produce the efficient level of output, and there will be no deadweight loss. However, consumer and producer surplus will increase with the subsidy.

Question 16

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$. The initial supply curve is $P = 2 Q ^ { s }$. Suppose that the government imposes a $\$ 3$ tax on this market. How much of this $\$ 3$ is paid for by producers?
A)$0.
B)$1.
C)$1.50.
D)$2.

Accepted Answer

To find out how much of the $3 tax is paid by producers, we first need to determine the new equilibrium after the tax is imposed. The initial equilibrium is found where demand equals supply: $90 - Q^d = 2Q^s$. Since $Q^d = Q^s = Q$, we have $90 - Q = 2Q$, leading to $3Q = 90$, so $Q = 30$, and the initial equilibrium price is $P = 2Q = 60$.When a $3 tax is imposed, the supply curve shifts up by $3, becoming $P = 2Q^s + 3$. To find the new equilibrium quantity, we set the new supply equal to the original demand: $90 - Q = 2Q + 3$, simplifying to $3Q = 87$, so $Q = 29$.The new price producers receive is found by substituting $Q = 29$ into the shifted supply equation: $P = 2(29) + 3 = 61$. However, this is the price before tax. The actual amount received by producers is $P - 3 = 61 - 3 = 58$. The initial price was $60, so the producers are effectively paying $2 of the $3 tax through receiving a lower price for their product.

Question 17

Consider a perfectly competitive market with market supply $Q ^ { s } = - 2 + P$ and market demand $Q ^ { d } = 30 - P$. What is the equilibrium quantity in this market?
A)12
B)14
C)16
D)18

Accepted Answer

The answer of Consider a perfectly competitive market with market...

Question 18

Consider a perfectly competitive market with market supply $Q ^ { s } = - 2 + P$ and market demand $Q ^ { d } = 30 - P$. Suppose the government imposes an excise tax of $\$ 4$ per unit on this market.
What is total surplus (consumer surplus plus producer surplus) after the government imposes the tax?
A)72
B)98
C)144
D)196

Accepted Answer

First, we need to find the equilibrium price and quantity in the absence of the tax. Setting market supply equal to market demand:

$Q ^ { s } = Q ^ { d }$ 
$-2 + P = 30 - P$ 
$P^* = 16$
$Q^* = 14$

With a tax of $\$4$ per unit, the new market supply curve is $Q ^ { s } = -2 + P - 4$, or $Q ^ { s } = -6 + P$. The new equilibrium price and quantity are found by setting market supply equal to market demand:

$Q ^ { s } = Q ^ { d }$ 
$-6 + P = 30 - P - 4$ 
$P^* = 20$ 
$Q^* = 10$

To find consumer surplus, we need to calculate the area under the demand curve and above the equilibrium price, up to the quantity purchased. This is a triangle with base 6 (the difference between the original quantity of 14 and the new quantity of 10) and height 10 (the difference between the original equilibrium price of 16 and the new equilibrium price of 20), divided by 2, or $6 \times 10 / 2 = 30$.

To find producer surplus, we need to calculate the area above the supply curve and below the equilibrium price, up to the quantity sold. This is a triangle with base 6 and height 14 (the original quantity), divided by 2, or $6 \times 14 / 2 = 42$.

Total surplus is the sum of consumer surplus and producer surplus, or $30 + 42 = 72$. Before the tax, we need to find the equilibrium price and quantity by setting market demand equal to market supply:

\begin{align*}
Q ^ { s } &= Q ^ { d } \
- 2 + P &= 30 - P \
P &= \$16 \
Q &= 30 - 16 = 14
\end{align*}

After the tax of $\$ 4$ is imposed, the new supply curve will shift upward by $\$ 4$ (since sellers need to receive the same amount after the tax):

\begin{align*}
Q ^ { s } &= - 2 + P - 4 \
&= P - 6 \
\end{align*}

The new equilibrium price will be the price that makes the quantity demanded equal to the quantity supplied:

\begin{align*}
Q ^ { s } &= Q ^ { d } \
P - 6 &= 30 - P \
P &= \$18 \
\end{align*}

The quantity demanded and quantity supplied at this new equilibrium price are:

\begin{align*}
Q ^ { d } &= 30 - 18 = 12 \
Q ^ { s } &= 18 - 6 = 12 \
\end{align*}

To find the new consumer surplus, we need to find the area below the demand curve and above the new equilibrium price:

\begin{align*}
\text{New Consumer Surplus} &= \frac { ( \$ 30 - \$ 18 ) \times 12 } { 2 } \
&= \$72 \
\end{align*}

To find the new producer surplus, we need to find the area below the new equilibrium price and above the supply curve:

\begin{align*}
\text{New Producer Surplus} &= \frac { ( \$ 18 - ( \$ 16 + \$ 4 ) ) \times 12 } { 2 } \
&= \$72 \
\end{align*}

Therefore, the total surplus is:

\begin{align*}
\text{Total Surplus} &= \text{Consumer Surplus} + \text{Producer Surplus} \
&= \$72 + \$72 \
&= \$144 \
\end{align*}

Question 19

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$. Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the impact on the government's budget resulting from the subsidy?
A) $- 45$
B) $- 50$
C) $- 270$
D) $- 300$

Accepted Answer

The answer of Consider a perfectly competitive market with inverse...

Question 20

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$. Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the increase in consumer surplus resulting from the subsidy?
A)17
B)19
C)21
D)23

Accepted Answer

To find the increase in consumer surplus resulting from the subsidy, we first need to determine the equilibrium quantity and price before and after the subsidy. Before the subsidy, we equate the supply and demand equations to find the equilibrium:$$5 + 3Q = 50 - 2Q$$Solving for $Q$ gives:$$5Q = 45$$$$Q = 9$$Substituting $Q = 9$ into either the supply or demand equation to find the equilibrium price:$$P = 50 - 2(9) = 32$$After the subsidy, the supply equation becomes:$$P - 5 = 5 + 3Q$$$$P = 3Q + 10$$Equating the new supply equation with the demand equation:$$3Q + 10 = 50 - 2Q$$$$5Q = 40$$$$Q = 8$$Substituting $Q = 8$ into the demand equation to find the new price consumers pay:$$P = 50 - 2(8) = 34$$However, the calculation above seems to have an error in adjusting for the subsidy's effect on the market. Let's correct the approach:With a subsidy of $5, the effective price received by suppliers is $P_s = P + 5$. The correct adjustment for the subsidy in the supply equation should reflect that suppliers are willing to supply at a price that is $5 less than the market price because they receive a $5 subsidy, effectively lowering the supply price to consumers.The correct approach to incorporate the subsidy is to adjust the supply equation to reflect the subsidy's impact correctly, then find the new equilibrium and calculate the change in consumer surplus. However, the initial calculation made mistakes in handling the subsidy's effect on the market equilibrium.Given the mistake in the calculation process and recognizing the need for a correct approach to determine the increase in consumer surplus with the subsidy, the correct steps involve:1. Adjusting the supply equation to account for the subsidy.2. Finding the new equilibrium quantity and price with the subsidy.3. Calculating the change in consumer surplus from the change in equilibrium.The correct answer should reflect the increase in consumer surplus due to the subsidy, which requires accurately determining the market's new equilibrium after the subsidy is applied. The provided calculations did not correctly adjust for the subsidy's impact, leading to an incorrect analysis. To find the increase in consumer surplus, one would typically calculate the area of the triangle formed by the change in price and quantity in the demand curve, but without the correct post-subsidy equilibrium, the specific increase cannot be accurately determined from the provided solution steps.

Quiz 10: Competitive Markets: Applications

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the deadweight loss resulting from the subsidy?

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What are the equilibrium price and quantity traded before the subsidy?

An analysis that determines the equilibrium prices and quantities in more than one market simultaneously is calledL

If supply is relatively inelastic when compared with demand in a perfectly competitive market,:

The incidence of a tax depends on:

If the government decides to subsidize a good, it will typically do all of the following except:

An analysis that determines the equilibrium prices and quantities in one market holding constant prices in all other markets is called:

When a perfectly competitive market is in equilibrium,:

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. What is the change in consumer surplus due to the tax?

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the equilibrium quantity traded after imposition of the subsidy?

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. How much of this $\$ 3$ tax is paid by consumers?

In a perfectly competitive market, which of the following will not occur as a result of an excise tax?

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. What are the government receipts from the tax?

When a tax is imposed on the producers of a product, which of the following is incorrect?

In a perfectly competitive market, which of the following will not occur as a result of a subsidy?

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. How much of this $\$ 3$ is paid for by producers?

Consider a perfectly competitive market with market supply $Q ^ { s } = - 2 + P$ and market demand $Q ^ { d } = 30 - P$ . What is the equilibrium quantity in this market?

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the impact on the government's budget resulting from the subsidy?

Consider a perfectly competitive market with inverse market supply $P = 5 + 3 Q ^ { s }$ and inverse market demand $P = 50 - 2 Q ^ { d }$ . Suppose the government subsidizes this market with a subsidy of $\$ 5$ per unit. What is the increase in consumer surplus resulting from the subsidy?