Demand and supply of rice in Korea are given as follows: 1 Demand Curve: Qa =...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Demand and supply of rice in Korea are given as follows: 1 Demand Curve: Qa = -P + 100 4 Supply Curve: Qs = P - 100 a. Find the equilibrium price and quantity in Korea's rice market. What are the consumers' and producers' surpluses in equilibrium? Provide the demand-supply diagram to illustrate the situation. b. Suppose that, due to bad weather, crop failure reduces the supply of rice and the new supply curve is given by QS = P + 150 What happens to the rice farmers' revenues in the country as a whole? How could it happen? You can use your graph in part (a). c. Would this outcome in part (b) make rice farmers happy or unhappy? Why or why not? Explain. d. Suppose that the government tries to help the farmers in the inflicted area by imposing a 10-dollar sales tax to rice buyers. The entire tax revenue will go to the farmers. Would this policy really help the farmers as intended? Explain. (For simplicity, assume that all farmers are inflicted equally. Compare the situations before/after tax, not before/after bad weather.) You may use the graph in part (a), or draw a new graph. Demand and supply of rice in Korea are given as follows: 1 Demand Curve: Qa = -P + 100 4 Supply Curve: Qs = P - 100 a. Find the equilibrium price and quantity in Korea's rice market. What are the consumers' and producers' surpluses in equilibrium? Provide the demand-supply diagram to illustrate the situation. b. Suppose that, due to bad weather, crop failure reduces the supply of rice and the new supply curve is given by QS = P + 150 What happens to the rice farmers' revenues in the country as a whole? How could it happen? You can use your graph in part (a). c. Would this outcome in part (b) make rice farmers happy or unhappy? Why or why not? Explain. d. Suppose that the government tries to help the farmers in the inflicted area by imposing a 10-dollar sales tax to rice buyers. The entire tax revenue will go to the farmers. Would this policy really help the farmers as intended? Explain. (For simplicity, assume that all farmers are inflicted equally. Compare the situations before/after tax, not before/after bad weather.) You may use the graph in part (a), or draw a new graph.
Expert Answer:
Answer rating: 100% (QA)
a To find the equilibrium price and quantity we need to set the demand equal to the supply Qd QS 14P 100 P 100 54P 200 P 160 per unit Substitute the e... View the full answer
Related Book For
Managerial economics
ISBN: 978-1118041581
7th edition
Authors: william f. samuelson stephen g. marks
Posted Date:
Students also viewed these accounting questions
-
What would happen to the equilibrium price and quantity exchanged in the following cases? a. An increase in income and a decreasing price of a complement, for a normal good b. A technological advance...
-
What will happen to the equilibrium price and quantity of beef if the price of chickenfeed increases?
-
How would the equilibrium price and quantity change in the market depicted below if the marginal cost of every producer were to increase by $2/lb? Price (S/Ab Quantity ilb/day) 0
-
Add to Graph a method subgraph() that takes a SET as its argument and returns the induced subgraph (the graph comprising the specified vertices together with all edges from the original graph that...
-
What are some advantages of the CD-ROM, commercial on-line, and Internet platforms for CATR?
-
What is meant by credible periodic reporting? What prevents organizations from making financial statements increasingly credible?
-
Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line basis over seven years. Craxton can lease the...
-
Southwest Tours Co. is travel agency. The nine transactions recorded by Southwest Tours during May 2012, its first month of operations, are indicated in the following T accounts: Indicate for each...
-
6. The number of (staircase) paths in the xy-plane from (0, 0) to (7, 5) where each such path is made up of individual steps going one unit upward (U) or one unit to the right (R). (a) 12C5 (b) 12!...
-
Harrell and Smith, Inc., 204 Ambulance Street, Anywhere, CA 92345, is a corporation (EIN 57-1234567) formed on January 1, 2010. Information concerning the corporation and its two shareholders...
-
Which of the following is not one of the five steps for recognizing revenue? Multiple Choice O O Allocate the transaction price to each performance obligation. Estimate variable consideration....
-
The gauge pressure at the bottom of a cylinder of liquid is \(p_{\mathrm{g}}=0.40 \mathrm{~atm}\). The liquid is poured into another cylinder with twice the radius of the first cylinder. What is the...
-
A \(1.00 \mathrm{~kg}\) block is attached to a horizontal spring with spring INT constant \(2500 \mathrm{~N} / \mathrm{m}\). The block is at rest on a frictionless surface. A \(10.0 \mathrm{~g}\)...
-
It At noon on a sunny day, the intensity of sunlight is \(1000 \mathrm{~W} / \mathrm{m}^{2}\). A student uses a circular lens \(5.0 \mathrm{~cm}\) in diameter to focus light from the sun onto a...
-
Water flows into a horizontal, cylindrical pipe at \(1.4 \mathrm{~m} / \mathrm{s}\). The pipe then narrows until its diameter is halved. What is the pressure difference between the wide and narrow...
-
Give three real-world examples of oscillatory motion. (Note that circular motion is similar to, but not the same as oscillatory motion.)
-
Hal invested $1200 per year in an IRA each year for 9 years earning 8% compounded annually. At the end of 9 years he ceased the IRA payments, but continued to invest his accumulated amount at 8%...
-
Modify the counter from Exercise 5.44 such that the counter will either increment by 4 or load a new 32-bit value, D, on each clock edge, depending on a control signal Load. When Load = 1, the...
-
In her last-minute preparations for final exams, a student has set aside five hours to split between studying for two subjects, finance and economics. Her goal is to maximize the average grade...
-
In 1989, the Detroit Free Press and Detroit Daily News (the only daily newspapers in the city) obtained permission to merge under a special exemption from the antitrust laws. The merged firm...
-
In a second-bid auction, buyers submit sealed bids, and the highest bidder obtains the item for sale but pays the seller an amount equal to the second highest bid. a. Suppose buyers hold different...
-
Describe the role of a paralegal in a family law practice.
-
Define family law and identify the kinds of issues that are addressed in a family law practice.
-
Identify the kinds of resources included in a basic family law library.
Study smarter with the SolutionInn App