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32.
Which of these does NOT explain the diamond-water paradox?
The MU of diamonds is higher than the MU of water.
The
Diamonds create more
Water creates more total utility than diamonds.
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- Under which circumstances does line tax burden fall entirely on consumers?5. At present, the price of $10, a football in the US and 5 million are sold annually. Market demand has shown that the demand curves are linear, and that price elasticity of market demand is -4.0 and the price elasticity of supply is +2.0. a) Calculate the demand and supply curves for footballs in the US. b) The US government imposes a $3 tax on every football sold in the country. How much revenue will the tax raise, and how much will the tax effect consumer surplus and producer surplus?|a. Assume that the elasticity of demand for Fanta is -0.5 while the elasticity of supply is 0.7. Assuming further that a tax of K10 is applied on each bottle of Fanta sold, how much of this will be borne by producers. b. Assume that the price of good X is K10 while that of good Y is K20. A consumer has allocated consumption between the two goods in such a way that the marginal utility of X is 15 utils and that of Y is 25 utils. Is this an optimal consumption bundle? If not, what should the consumer do to reach the optimum?
- Refer to the figure below. If the government sets a price ceiling of $6, 18 16 14 12 10 8 6 4 2 2 4 4 68 10 12 14 16 18 there would be a shortage of 14 units. D₁ there would be an excess supply of 6 units. There would be a shortage of 4 units. consumers would demand 14 units.only typed answer A consumer has inverse demand of p=15−1q for a good and the market price is $4.00. Calculate consumer surplus and the total value of the good for the corresponding quantity consumed. Consumer surplus is $enter your response here. (Enter your response rounded to two decimal places.) The consumer's expenditure for the good is $enter your response here. (Enter your response rounded to two decimal places.)2. When the price of Tacos is $1.50, there is a shortage in the market of Tacos of 15 units. In response to the shortage, sellers increase the price of Tacos to $2.50 and the market clears with the corresponding increase in quantity supplied being equal to the quantity demanded at that price. Total surplus in the market for Tacos is maximized when the price of Tacos is more than $2.50 the price of Tacos is $1.50 the price of Tacos is $2.00 the price of Tacos is $2.50
- An annual city permit fee causes the supply curve for hot dogs from food carts to shift from S1 to S2. The fee is based on number of units sold and therefore works like a per-item tax on sellers. Use the area tool to draw the area representing the deadweight loss that is due to the tax. To refer to the graphing tutorial for this question type, please click here. Price ($) 8. S2 S1 7.5 7 6.5 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 4 VIEW SOLUTION * SUBMIT ANSWER 7 OF 14 QUESTIONS COMPLETED MacBook ProNeed answer asap. Consumer surplus? A limited edition package is sold only to 200 customers for $130 each. The average value of the package for the 200 customers is $280.8. If the demand equation is Q =100–10Pfind the consumer's surplus when the consumer purchases 18 units. What is the revenue of the seller?
- 1. Determine the amount of consumer surplus generated in each of the following situations a. William goes to the clothing store to buy a new T-shirt, for which he is willing to pay up to $10. He picks out one he likes with a price tag of exactly $10. At the cash register, he is told that his T-shirt is on sale for half the posted price. b. Sophia goes to the CD store hoping to find a used copy of the Eagles Greatest Hits for up to $10. The store has one copy selling for $10 c. After baseball practice, Nicholas is willing to pay $2 for a bottle of mineral water. The 7-Eleven sells mineral water for $2.25 a bottle.3.In the market for nutritional bars there are two types of consumers: men and women. Suppose that the market equilibrium happens at the same price and quantity for both the women and men's market. At the market equilibrium, the price elasticity of demand for men is ϵMD,P=−2 and the price elasticity of demand for women is ϵWD,P=−2.4. If the supply for nutritional bars is perfectly elastic and if the government implements a subsidy of $A$A in this market, we can be sure that: The increase in the consumer surplus for women will be ?? (greater tlower tequal) than the increase in the consumer surplus for men. The deadweight loss will be greater in which market? (women, men, both)1. City planners are proposing a 5% increase in all water rates. Prior to adopting this policy, the city council would like to receive information about the effects on consumers and the water department. We can rough out some quick and useful estimates using knowledge of an annual demand point and the price elasticity of demand (remember the point expansion method). Suppose the water department delivers 180 million gallons per year while taking in $740,000 in revenue per year. Of this revenue, $520,000 is derived from volumetric (metered) charges, and the remainder comes from fixed fees such as monthly charges and late fees. Assume that the price elasticity of water demand is -0.3. (a) How much will the consumers' total welfare change? Hints: • Remember the point expansion method, where using the elasticity and a point from on the demand curve, we can reclaim the entire demand equation. • Assume a linear demand curve. • Remember the elasticity formula: dw P dp w • Note that this…