Question : Table 4-9 Price per Bushel (dollars) Quantity Demanded (bushels) : 1245094

 

 

Table 4-9

Price per Bushel

(dollars)

Quantity Demanded (bushels)

Quantity Supplied (bushels)

$2

40,000

        0

  4

34,000

  4,000

  6

28,000

  8,000

  8

24,000

16,000

10

20,000

20,000

12

18,000

28,000

14

12,000

36,000

16

  6,000

40,000

 

Table 4-9 above contains information about the corn market. Answer the following questions based on this table.

 

114) Refer to Table 4-9. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel.

a.What is the amount of shortage or surplus in the corn market as result of the price floor?

b.If the government agrees to purchase any surplus output at $12, how much will it cost the government?

c.If the government buys all of the farmers’ output at the floor price, how many bushels of corn will it have to purchase and how much will it cost the government?

d.Suppose the government buys up all of the farmers’ output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme, what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government’s sale?

e.In this problem we have considered two government schemes: (1) a price floor is established and the government purchases any excess output and (2) the government buys all the farmers’ output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer?

f.Consider again the two schemes. Which scheme will the farmers prefer?

g.Consider again the two schemes. Which scheme will corn buyers prefer?

 

115) The cities of Francistown and Nalady are five miles apart. Francistown enacts a rent control

law that puts a ceiling on rents well below their equilibrium market value. Predict the impact of this law on the competitive equilibrium rent in Nalady, which does not have a rent control law.

a.Illustrate your answer with one demand and supply graph for the apartment market in Francistown and another demand and supply graph for the apartment marketing Nalady.

b.Make sure that your graphs clearly show (1) the initial equilibrium before the rent control in both markets and (2) what happens after the imposition of rent control.

c.Clearly show any shifts in the demand or supply curves, and the movement along the curves for each market.

d.Label your graphs fully and provide written explanation for your graphs.

 

 

Table 4-10

Price  Per Bushel

(dollars)

Quantity Demanded (bushels)

Quantity Supplied (bushels)

$3

36,000

        0

  6

30,000

  2,000

  9

25,000

  5,000

12

20,000

10,000

15

16,000

16,000

18

13,000

23,000

21

8,000

30,000

24

3,000

36,000

 

Table 4-10 above contains information about the wheat market. Answer the following questions based on this table.

 

116) Refer to Table 4-10. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for wheat at $21 per bushel.

a.What is the amount of shortage or surplus in the wheat market as result of the price floor?

b.If the government agrees to purchase any surplus output at $21, how much will it cost the government?

c.If the government buys all of the farmers’ output at the floor price, how many bushels of wheat will it have to purchase and how much will it cost the government?

d.Suppose the government buys up all of the farmers’ output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme, what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government’s sale?

e.In this problem we have considered two government schemes: (1) a price floor is established and the government purchases any excess output and (2) the government buys all the farmers’output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer?

f.Consider again the two schemes. Which scheme will the farmers prefer?

g.Consider again the two schemes. Which scheme will wheat buyers prefer?

a.22,000 surplus.

b.$21 × 22,000 = $462,000.

c.30,000 bushels × $21 = $630,000.

d.$6 per bushel and government receives $6 × 30,000 = $180,000.

e.Taxpayers prefer scheme (1).

f.In terms of revenue, farmers are indifferent between the two schemes.

g.Wheat buyers prefer scheme (2).

 

 

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