Microeconomics Chapter 5 Homework

Total surplus is maximized at the equilibrium price and quantity . If the price increases due to an increase in demand , total surplus is still maximized because

the market will adjust to a new equilbrium at which total surplus is maximized .

c . Draw the consumer surplus and producer surplus if the price is $ 10 . At this price , consumer surplus is $ producer surplus is $ , and total surplus is $

this price , consumer surplus is $ 50. producer surplus is $ 10 , and total surplus is $ 60

Use the supply and demand equations below to answer the following questions Demand : P = 50 - 4Q Supply : P = 2 + 2Q a . The equilibrium quantity is and the equilibrium price is $ b . Graph supply and demand and illustrate the equilibrium . endpoints. C. The amount of consumer surplus is ___ D. The amount of producer surplus is ____ E the amount of total surplus is

A. 8,$18 C. $128 D. $64 E. $192

Consider a policy help struggling farmers by setting a minimum trade price for wheat . Which of the following statements is true ?

Some farmers would gain surplus at a higher price but fewer trades would occur and some farmers will be unable to trade

Consider the market represented in the figure below . a . Draw the consumer surplus and producer surplus at the equilibrium price and quantity . Use the tools provided to illustrate the consumer surplus ' CS ' and producer surplus ' PS ' on the graph . Drag the points to resize or move .

Total Surplus at the equilibrium price and quantity is $80

The figure below shows a market for cotton , with the price held at $ 0.80 per pound . Draw the deadweight loss in this market . The deadweight loss caused by this policy is : $

The deadweight loss caused by this policy is : $ 3 million .

b . Draw the consumer surplus and producer surplus if the price is $ 30 . At this price , consumer surplus is $ producer surplus is $ and total surplus is $

At this price , consumer surplus is $ 10. producer surplus is $ 50 , and total surplus is $ 60

Consider the market represented in the figure below . a . If the government sets a minimum price of $ 25 in the market , the deadweight loss is : b . If the government sets a maximum price of $ 25 in the market , the deadweight loss is :

a . If the government sets a minimum price of $ 25 in the market , the deadweight loss is : $ 60- > b . If the government sets a maximum price of $ 25 in the market , the deadweight loss is : $ 0