1500 1350 1200 1050 900 600 450 300 150 0 Quantity (units per month) Question 1:

Question

1500 1350 1200 1050 900 600 450 300 150 0 Quantity (units per month) Question 1: The figure above depicts the market for espresso makers in Seattle, WA. Suppose the government imposes a price ceiling on espresso makers of $300 per unit. At this price ceiling, producer surplus will be per month 1) 2) 3) 4) .5*30*$300=$4,500 .5*30*$300 + (30*$750) = $27,000 .5* 30*$450 = $6,750 30*$300=$9,000 Question 2: The figure above depicts the market for espresso makers in Seattle, WA. Suppose the government imposes a price ceiling on espresso makers of $300 per unit. At this price ceiling, deadweight loss will beper month. 1) 2) 3) 4) .5*30*$300=$4,500 .5*30*$300 + (30*$750) = $27,000 .5*30*$450 + (30*$750) = $33,750 .5*30*$750=$11,250 Question 3: The figure above depicts the market for espresso makers in Seattle, WA. Suppose the government imposes a price ceiling on espresso makers of $300 per unit. At this price ceiling, the quantity of espresso makers supplied wil1 be units per month and the quantity of espresso makers demanded will be_per month. The total revenue from espresso maker sales will be C 1) 30; 80; S9,000 -, per month. C 2) 80; 30; $24,000 C 3) 60; 60; S36,000 C 4) 40; 90; $36,000 Question 18: The figure above depicts the market for espresso makers in Seattle WA. Ceteris paribus, if a new study shows that drinking espresso is associated with improved health, a possible new equilibrium price and quantity of espresso makers could be 1) P = $600: Q = 160 2) P = $900: Q = 90 3) P=$150; Q = 90 4) P = $300: Q = 30

Explanation / Answer

Ans)

1.
1) 0.5*30*$300=$4,500
PS=0.5*(30)*(300)=4500
Producer surplus is the area above the supply curve and the price.

2.
4).5*30*$75-=$11,250
DWL=0.5*(1050-300)*30=11,250

18.

2) P=$150;Q=90

If studies show that espresso is good for health then the demand will increase thereby shifting the demand curve to the right.This will mean that the new equilibrium will be to the right of the old equilibrium with a higher price.This is true for Q=90 and price of 900

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