Homework 3 - ECON 1014-01 HOMEWORK#3 DR PODGURSKY Due...

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Page 1 ECON 1014-01 HOMEWORK #3 DR. PODGURSKY Due: 10/16/2014. Homework can be turned in after class or by 4:00 p.m. at the Econ Help Desk in 1A West in the Professional Building. No assignments will be accepted after 4:00 p.m. on 10/16/2014. Please print this assignment from Blackboard and staple!!! (Show your work if specified) Name: ___________________________________ Pawprint ID: ______________________ Chapter 8 Use the following graph for the question(s) below. Figure: Supply and Demand 3 1. Shade and appropriately label the regions in the above graph that represent consumer surplus, producer surplus, and deadweight loss if the government imposes a price ceiling at $8 on this market. (2 pts) 2. At $8, buyers demand ____________ units, and sellers supply _____________ units. Thus, the price ceiling causes a shortage of ___________ units. (1 pt)
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Page 2 Score ______ / 22 3. Graphically illustrate supply and demand in a market where a price floor has been instituted above the equilibrium price. Is there a shortage or a surplus of this good because of the price floor? On your graph, shade in the area of lost gains from trade and explain why this results in market inefficiency. Also shade in all other important regions. (4 pts)
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