Question

A mango Supply and Demand for a tropical country are given by ;

Demand: P = 50 – (QD) and supply: P = 25 + (QS) where QD = quantity demanded of mangoes and QS = quantity supplied of mangoes

1. Draw the market supply and demand curves. What are the efficient price and efficient quantity? Explain the law of supply and the law of demand.
2. Show on your graph consumer surplus and producer surplus and calculate the values of consumer surplus and producer surplus.
3. Instead of a price ceiling, the government provides a subsidy of $8 to consumers, illustrate graphically the economics effects of this intervention
4. Compute the deadweight loss and the consumer surplus
5. Assume that the government levied a $6 tax on the consumers of mangoes. Illustrate graphically the different economics effects of the tax.

1. Steel Supply and Demand for USA

Price	Quantity Supplied	Quantity Demanded
0	0	12
200	2	10
400	4	8
600	6	6
800	8	4
1000	10	2
1200	12	0

2. Show on your graph consumer surplus and producer surplus and calculate the values of consumer surplus and producer surplus.
3. The government decides to impose a price ceiling of $200. Illustrate graphically the different economics effects of such intervention in this market.
4. Compute the deadweight loss generated by the government intervention and the new consumer surplus .
5. Instead of a price ceiling the government provides a subsidy of $50 to consumers, illustrate graphically the economics effects of this intervention.
6. Compute the deadweight loss and the consumer surplus
7. Assume that the government levied a $50 tax on the suppliers of steel. Illustrate graphically the different economics effects of the tax ( and compute the DWL and specify the tax burden ).

8. The government decides to impose a price floor of $750. Illustrate graphically the different economics effects of such intervention in this market.

9. Compute the deadweight loss generated by the government intervention and the producer surplus.

10. Assume that the government levied a $25 tax on the consumers of steel. Illustrate graphically the different economics effects of the tax.

Answer 1