1. Suppose the demand for shoes is given by: Q_D= 300 -P. The supply of shoes is given by: Q_S= 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: Q_D= 200 -P. The supply of jackets is given by: Q_S= 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 Q_S - Q_D. Negative numbers indicate shortage. Positive numbers indicate surplus.

3. The demand for wheat is given by: Q_D= 220 -P. The supply of wheat is given by: Q_S= 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: Q_D= 186 -0.4P. The supply of wheat is given by: Q_S= 3P -120. Suppose the government imposes a a price ceiling of $68.

Calculate the dollar amount of consumer surplus from the price ceiling.

Answer rating: 100% (QA)

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