Q1. (5 points) Use Figure 1 below to answer questions la and 1b by filling in th

Question

Q1. (5 points) Use Figure 1 below to answer questions la and 1b by filling in the blanks below 30) 150 3(10 Million01 10D 1.a If the Department of Agriculture enacts a price floor of S30/ton, then consumers will demand million tons of per month, and a appear million tons of grain per month, producers will offer of 100 million tons/month will 1.b. If the Department of Agriculture enacts a price ceiling of SIO/ton, then consumers will million tons of grain/month, producers will offer million demand tons per month, anda of 100 million tons/month will appear

Explanation / Answer

Q1
Answer
1.a
100 million
200 million
surplus

The price floor is effective above equilibrium price, the equilibrium price is $20 where Qd=Qs and Q=150
P=$30
Qd=100 and Qs=200
surplus=Qs-Qd=200-100=100
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1.b
200 million
100 million
shortage
The price ceiling is effective below equilibrium price, the equilibrium price is $20 where Qd=Qs and Q=150
P=$10
Qs=100 and Qd=200
shortage =Qd-Qs=200-100=100

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