Practice_Midterm_1

Eachorderthatyoufilltakes30minutesandconsumessomeamoun

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: The
Government
of
Ollantaytambo
is
planning
to
impose
a
price
control
on
the
price
of
 quinoa
–
the
staple
food
of
the
people.
According
to
IncaNielsen’s
recent
market
report,
 d
 market
demand
for
quinoa
is
given
by
Q =
40
–
2P
and
the
market
supply
curve
is
given
by
 s
 d
 s
 Q =
‐15
+
3P,
where
P
denotes
the
market
price
in
dollars
per
kilogram
and
Q and
Q denote
the
quantities
demanded
and
supplied,
respectively
(measured
as
kilograms
per
 year).
The
Government
is
planning
to
limit
the
market
price
of
quinoa
to
$8
per
kilogram.

 
 You
have
been
engaged
as
an
expert
economic
adviser
to
evaluate
the
effect
of
this
price
 control.

The
Government
of
Ollantaymbo
hopes
that
you
will
be
able
to
provide
them
a
 prediction
of
the
market
prices
and
quantities
as
a
result
of
the
price
control,
and
give
an
 estimate
of
the
benefits
and
losses
from
this
Government
intervention.

 
 The
following
steps
should
assist
you
in
reaching
a
conclusion.
(If
you
find
it
easier,
you
 can
use
a
diagram
to
d...
View Full Document

Ask a homework question - tutors are online