Compute the lost social welfare, Macroeconomics

Assignment Help:

Consider a market where supply and demand are given by QXS = -18 + PX and QXd = 90 - 2PX. Suppose the government imposes a price floor of $41, and agrees to purchase any and all units consumers do not buy at the floor price of $41 per unit.

a. Determine the cost to the government of buying firms' unsold units.

b. Compute the lost social welfare (deadweight loss) that stems from the $41 price floor.


Related Discussions:- Compute the lost social welfare

Four different measures of GDP, Four different measures of GDP Using ci...

Four different measures of GDP Using circular flow model we see that there are 4 equivalent ways of measuring GDP:  Using the definition: market value of all finished goo

Elucidate the factors of global demand and supply, Many economists and mark...

Many economists and market analysts are avid followers of the BALTIC DRY INDEX (BDI) as a forward looking mechanism that may shed a bit of light on the evolution of global economic

GDP AND PRICE LEVEL IN SHORT RUN, #question.WHAT IS GDP AND DIFFERENT PRICE...

#question.WHAT IS GDP AND DIFFERENT PRICE LEVEL IN SHORT RUN?.

Properties of indifference curve, Properties of indifference curve:   P...

Properties of indifference curve:   Property I: Higher indifference curve gives higher utility.      Explanation: Since all goods are non-satiated, larger consumpti

How rates depends on maturity, How rates depends on maturity Rates depe...

How rates depends on maturity Rates depending on maturity. Even though rates with different maturity (all recalculated to a yearly rate) need not be exactly equal, they cannot

SARB, #If the reserve bank wants to pursue a contractionary monetary policy...

#If the reserve bank wants to pursue a contractionary monetary policy, the bank should?

Explain the classical motivation, Q. Explain the classical motivation? ...

Q. Explain the classical motivation? The classical motivation: Consumers want to smooth their consumption over time. In good times, consumers know that it is a temporary stat

Combination, take one set ( lk& output) to prove

take one set ( lk& output) to prove

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd