HO4_KeyF06 - Cal Poly Pomona EC 201 Principles of...

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Unformatted text preview: Cal Poly Pomona, EC 201 Principles of Microeconomics — Professor Brown Handout # 4 1) Price per Supply Banana ' $2.00 Pl" 2'10 [191' ’Inj Demand Quantity of Bananas Q* Show the effect of a $1.50 per banana price ceiling on the graph above. Be sure to indicate any surplus or shortage. If there was a $1.50 per banana price floor would it be binding? Would there be any shortage or surplus? 6 I \ 12)— ”QT Bruth‘fg , AM {who/v5 3:121:58 r Supply 0 r 5 I" 9'” 1(0'51 l" P ~ buyers (w! tax) _ __ f P - no tax P — sellers (wt tax Demand Quantity of Mangos Qlax Quotas The above diagram shows the effect of a tax in the market for mangos 2) a) lfthis were an excise tax, which curve would shiflfiuppl' 71:1 what direction? E4 / U! ) Realize the area represented by the two rectangles B and D represents the tax revert are to go vernment b) What area(s) represent Consumer Surplus after the tax? A c) What area(s) represent Producer Surplus after the tax? E d) What area(s) represent the Dcadweight Loss of the tax? (1 'I' E ...
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