Presume that the government decides to guarantee an, Ask an Expert

Economics

Presume that the government decides to guarantee an above-market price for a good by buying up any surplus at that above-market price. Using a conventional supply-demand diagram, illustrate the following gains and losses from such a price support:

1. The loss of consumer surplus.

2. The gain of producer surplus in the short run

3. What is the total cost of the program to consumers?

4. The cost of running the government program (assuming on storage costs)

5. Are the cost and benefits of the support program widespread or concentrated?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91224983

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question 1 what determines market demand for gasoline why2

Question: 1. What determines market demand for gasoline? Why? 2. How does market supply come about? What factors influence If no, why not? 3. How do shifts in demand and supply interact? Translate the results in affectin ...

Question the price of licenses for tractors owned by

Question: The price of licenses for tractors owned by farmers who grow X falls. The cost of a license is independent of how many days the tractor is used. Will profits on the typical farm increase by more than, less than ...

Question graphingcalculating questions each of the

Question: Graphing/Calculating Questions: Each of the following should include the requested graphic 1. Using LD = 125-9W as a starting labor demand curve, indicate the change when consumers increase their demand for the ...

Question what are some of the problems associated with

Question: What are some of the problems associated with capitalism which the American people have called upon government to address? What are some examples of ways in which government has attempted to alleviate each of t ...

Question mr paul is consuming products x and y optimally

Question: Mr. Paul is consuming products X and Y optimally and deriving total utility of 10 utiles. when his budget is increased from K80 to k81, his utility increases from 10 utiles to 10.1 utiles. a) what is the margin ...

Question improved methods of inventory control were

Question: Improved methods of inventory control were supposed to reduce fluctuations in inventory stocks. It is clear that these methods have helped reduce the equilibrium inventory/sales ratios in both the manufacturing ...

Question also during the 1990s the ratio of capital

Question: Also during the 1990s, the ratio of capital spending to GDP rose, while the personal saving rate declined almost to zero. The profit ratio did not rise very much; hence almost the entire increase in saving came ...

Quesiton role of the counselor in the Quesiton: Role of the Counselor in the Community

Quesiton: Role of the Counselor in the Community Nine-year-old Wanda's teacher notices that for the past few weeks, Wanda has not been talking to her friends and is always sitting alone in a corner. After talking to Wand ...

Question explain the difference in the distribution

Question: Explain the difference in the distribution mechanism for goods and services in the market and command systems. Discuss the implications of this difference in terms of efficiency. The response must be typed, sin ...

Question look anywhere around your home or office and you

Question: Look anywhere around your home or office and you are sure to find products from every corner of the world. Even products that may be labeled as "Made in (fill in the blank)" are generally assembled from compone ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert