Assume there is a positive externality associated with having a tertiary education. Is the deadweight loss from the subsidy increased or decreased with the introduction of the positive externality? Why?
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Assume there is a positive externality associated with having a tertiary education. Is the
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- What is the price that consumers pay after the subsidy is implemented?The graph depicts the market for digital copies of a popular song. The digital music file is an artificially scarce good. Suppose the producer charges $2.50 per download. What is the resulting deadweight loss? Price per download $5 4.5 4 3.5 3- 2.5 2 1.5 I 0.5 0 10 20 30 Demand 40 50 60 70 80 90 100 Downloads per hourRefer to the figure below and answer the question that follows. Excess Burden of a Subsidy: Market Effects Rent (Dollars per Month) 400 B E A S = MSC C F E' S' 200 D = MSB 0 Q₁ Q2 Number of Apartments Rented A. The cost of the subsidy to the state is equal to the area BCFE B. The cost of the subsidy to the state is equal to the area EQ1Q2A OC. The cost of the subsidy to the state is equal to the area BCE'A OD. The cost of the subsidy to the state is equal to the area BOQ1E
- Consider the market below where the government has imposed a $12 excise tax on this product. P $33 $24 $18 $15 $12 $3 A B D F QE₁ 18 с E Siafter tax So before tax < Q QE₂ QE。 30 42 What area on the graph represents the total amount of DEADWEIGHT LOSS that results from the imposition of the tax?Identify at least one positive externality from running a donut shop. Identify at least one negative externality from running a donut shop. Explain how these positive and negative externalities could impact the donut shop’s profits. (Hint: think subsidy for positive externality and tax for negative externality.) Draw two graphs that show the price of donuts before and after the positive and negative externality impacted the price of your donuts.Consider a free market with demand equal to QQ = 900 − 10PP and supply equal to QQ = 20PP. Now the government imposes a $15 per unit subsidy on the production of the good. What is the consumersurplus now? The producer surplus? Why is there a deadweight loss associated with the subsidy, and whatis the size of this loss?
- Using the demand and supply graph given below, explain the impact of the ban in the market for cigarettes.Your student group is setting up an internship fair. You invite companies looking for interns and students looking for internships and offer them a place to connect. The UofT wants to encourage this event and offers a per-internship of $5000. Whom do you recommend they give the $5000 to?--the student who gets the internship, the company that hires the student or split the money between them equally? What would be the effect of a $5000 subsidy on the number of internships? Why?example of subsidy in the philippines
- Please answer the following. A diagram and one paragraph should help to support your answer. Question: With consideration for elasticity (especially PED), what would be one industry in which the government instituting a subsidy would make sense and why?Suppose the demand and the supply for lumber (harvested wood processed in a sawmill) used for construction in Australia are given byQD =100 – 2PQS = 1/2PAssume also that the market is perfectly competitive. the government introduces a subsidy of s=5 per unit of lumber transacted in the market. Calculate the deadweight loss caused by the subsidy and illustrate it in a graph. Who benefits more from the subsidy, consumers or producers? Why?Consider a free market with demand equal to QQ = 900 − 10PP and supply equal to QQ = 20PP. Now the government imposes a $15 per unit subsidy on the production of the good. What is the consumersurplus now? The producer surplus? Why is there a deadweight loss associated with the subsidy, and whatis the size of this loss? Demonstrate in a graph.
