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Unformatted text preview: 500P. If TV sets are sold in a perfect, competitive market, calculate the annual number of TV sold. Show the losses in well-being each year that would result from a law limiting sales of TV sets to 100,000 per year. Show the effect on the price, marginal social benefit, and marginal social cost of TV sets, as well as the change in total surplus. Show the loss in efficiency that would result from a complete ban on the sales of TV sets. 3. The market equilibrium price for rice in Japan would be $6 per kilogram in the absence of government subsidies to rice production. However, the government sets the price of rice at $10 per kilogram and agrees to buy all rice produced by farmers at that price. Show how the subsidy program will result in losses in efficiency....
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- Fall '06
- J Liu