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

Benefits of private actions, Public policies often alter the costs and bene...

Public policies often alter the costs and benefits of private actions. Why is it important for policymakers to consider both the direct and indirect effects of public policies? Sel

Trade unions, discuss the effect that the activities of a trade union might...

discuss the effect that the activities of a trade union might have on an economy?

Change in the dependent variable, All other things being held constant, wha...

All other things being held constant, what is the change in the dependent variable for a unit change in the first independent variable for the multiple regression equation: ? = 5.2

Neo-classical theory of trade, explain the neo-classical theory of trade an...

explain the neo-classical theory of trade and show the difference between this and the classical approach, as wellas the similarities

TAXATION, What is Inherent Limitation?

What is Inherent Limitation?

Balance of payment, what cause balance of payment curve to shift

what cause balance of payment curve to shift

Negative performances of the economy, An advantage of observing statistics ...

An advantage of observing statistics from this range is that it encapsulates both positive and negative performances of the economy helping to produce a much more accurate insight

Advantage and disadvantage of reducing dependence, What are the pros and co...

What are the pros and cons of reducing dependence on outsourcing in order to fulfill social obligations toward stakeholders?

Retirement planning, For retirement planning, you decided to deposit $1,000...

For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annu

Aggregate demand policies, Aggregate Demand Policies Both fiscal and m...

Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the

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