Exam 15: Equilibrium-Part A

The market for tennis shoes has a horizontal supply curve and a linear, downward-sloping demand curve.Currently the government imposes a tax of t on every pair of tennis shoes sold and does not tax other goods.The government is considering a plan to double the tax on tennis shoes, while leaving other goods untaxed.If the tax is doubled, then

The demand curve for rutabagas is a straight line with slope 23 and the supply curve is a straight line with slope 2.Suppose that a new tax of $3 per sack of rutabagas is introduced.

In a crowded city far away, the civic authorities decided that rents were too high.The long-run supply function of two-room rental apartments was given by q = 5 + 2p, and the long-run demand function was given by q = 225 - 4p, where p is the rental rate in crowns per week.The authorities made it illegal to rent an apartment for more than 30 crowns per week.To avoid a housing shortage, the authorities agreed to pay landlords enough of a subsidy to make supply equal to demand.How much would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?

The price elasticity of demand for a certain agricultural product is constant (over the relevant range of prices)and equal to -2.The supply elasticity for this product is constant and equal to 3.Originally the equilibrium price of this good was $45 per unit.Then it was discovered that consumption of this product was unhealthy.The quantity that would be demanded at any price fell by 100%.The percent change in the long-run equilibrium consumption of this good was

If the supply curve is vertical, then the amount supplied is independent of price.

In a crowded city far away, the civic authorities decided that rents were too high.The long-run supply function of two-room rental apartments was given by q = 14 + 5p, and the long-run demand function was given by q = 329 - 5p, where p is the rental rate in crowns per week.The authorities made it illegal to rent an apartment for more than 25 crowns per week.To avoid a housing shortage, the authorities agreed to pay landlords enough of a subsidy to make supply equal to demand.How much would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?

If the supply is perfectly elastic, then an upward shift of the demand curve will lead to a higher price and a higher quantity in equilibrium.

The quantity q of apricots demanded at price p is given by q = 36 - 4p and the supply schedule by q = 2p.The government imposes a quantity tax at some rate t, which it collects from buyers.What is the smallest tax rate that will result in no apricots being bought or sold?

The demand function for corn is q = 200 - p and the supply function is q = 50 + .5p.The government sets the price of corn at $150 and agrees to purchase and destroy any excess supply of corn at that price.How much money does it cost the government to buy this corn?

The demand curve for rutabagas is a straight line with slope 26 and the supply curve is a straight line with slope 2.Suppose that a new tax of $3 per sack of rutabagas is introduced.

The inverse demand function for apples is defined by the equation p = 214 - 5q, where q is the number of units sold.The inverse supply function is defined by p = 7 + 4q.A tax of $36 is imposed on suppliers for each unit of apples that they sell.When the tax is imposed, the quantity of apples sold falls to

The inverse demand function for eggs is p = 125 - 6q, where q is the number of cases of eggs.The inverse supply is p = 5 + 6q.In the past, eggs were not taxed, but now a tax of 72 dollars per case has been introduced.What is the effect of the tax on the quantity of eggs supplied?

In a certain kingdom, the demand function for rye bread was q = 381 - 3p and the supply function was q = 5 + 7p, where p is the price in zlotys and q is loaves of bread.The king made it illegal to sell rye bread for a price above 32 zlotys per loaf.To avoid shortages, he agreed to pay bakers enough of a subsidy for each loaf of bread so as to make supply equal demand.How much would the subsidy per loaf have to be?

The demand curve, which is a downward-sloping straight line, crosses the supply curve, which is an upward-sloping straight line.If a tax is introduced where sellers must pay a tax of $2 per unit sold, then the equilibrium price paid by demanders will rise by more than $1 if the absolute value of the slope of the demand curve is greater than the absolute value of the slope of the supply curve.

The demand function for x is D(p)= 65 - 2p and the supply function is S(p)= 20 + p.The price that should be set to restrict the quantity supplied to 30 units is closest to

The supply curve slopes up and to the right.If the demand curve shifts upward to a new curve which is everywhere higher than the old curve (but possibly of different slope)and if the supply curve does not shift, then the equilibrium price and quantity must necessarily increase.

An economic situation is Pareto optimal only if there is no way to make someone better off.

The demand function for rental apartments is q = 960 - 7p and the supply function is q = 160 + 3p.The government makes it illegal to charge a rent higher than $35.How much excess demand will there be?

The demand for pickles is given by p = 167 - 3q and the supply is given by p = 5 + 6q.What is the equilibrium quantity?

Supply and demand theory shows us that the burden of a sales tax is shared equally by suppliers and demanders whether the tax is collected from the sellers or collected from the buyers.