1. Suppose the demand for shoes is given by: Q D = 300 -P . The supply...
Question:
1. Suppose the demand for shoes is given by: QD= 300 -P. The supply of shoes is given by: QS= 5P -300.
Calculate the Gains from Trade (also known as Economic Surplus) that would exist in this market in a competitive equilibrium.
2. Suppose the demand for jackets was given by: QD= 200 -P. The supply of jackets is given by: QS= 8P -610. Suppose the price was $87 per jacket. Calculate whether there is a surplus or shortage of jackets at that price and the quantity of jackets associated with the surplus or shortage.
Enter your response as QS - QD. Negative numbers indicate shortage. Positive numbers indicate surplus.
3. The demand for wheat is given by: QD= 220 -P. The supply of wheat is given by: QS= 5P -80. Suppose the government imposes a a price ceiling of $49.
Calculate the dollar amount of deadweight loss from the price ceiling.
4. The demand for wheat is given by: QD= 186 -0.4P. The supply of wheat is given by: QS= 3P -120. Suppose the government imposes a a price ceiling of $68.
Calculate the dollar amount of consumer surplus from the price ceiling.