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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.
Assume a 5 year equal payment amortization schedule with an annual interest rate of 12% and annual payments. If the beginning is 8,000 then the first interest payment will be how l
what wil hapen to the real wage if the nominal wages and prices rise at the same rate per year?
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what is the supply side
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Discuss what policy changes he might be likely to propose with respect the issue that you identified as one about which he might be concerned.
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