final exam micro.docx - Hannah Wolfe ECON 201 1 A i If the price went up on the price of soda the quantity would decrease and that would cause the

final exam micro.docx - Hannah Wolfe ECON 201 1 A i If the...

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Hannah WolfeECON 2014/23/20181. Ai. If the price went up on the price of soda the quantity would decrease and that would cause the demand to decrease. ii. The persuasive commercial convinced consumers to consume more soda therefor the demand for soda would increase. b. The tenants are the consumer and the landlords are the producer. The tenants will gain the surplus at the expenses of the landlord, the landlords will lose more than the tenants will gain andthis will cause a deadweight loss. Since there is a deadweight loss the economic efficiency will decrease.
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Hannah WolfeECON 2014/23/2018Question 2A. A positive externality is a benefit that affects someone who is not directly involved in the production or consumption of a good or service. A negative externality is a cost that negatively effects a third party. B.C. The market operates most efficiently if the subsidy is equal to the amount of positive externality. The students who receive subsidy from the government create a positive externality.
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