City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. This question assumes that the market for apartments in Sydney is perfectly competitive. (a) Evaluate the decision of the NSW government to double the first home buyer subsidy in terms of Pareto efficiency and fairness. (b) Now suppose the NSW government decides not to help first home buyers in Sydney any longer and removes the existing subsidy. Evaluate this decision in terms of Pareto efficiency and fairness.
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City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. This question assumes that the market for apartments in Sydney is
(a) Evaluate the decision of the NSW government to double the first home buyer subsidy in terms of Pareto efficiency and fairness.
(b) Now suppose the NSW government decides not to help first home buyers in Sydney any longer and removes the existing subsidy. Evaluate this decision in terms of Pareto efficiency and fairness.
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- ToasterOvenslnc. is developing technology to make a toaster oven than uses less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column of Table 13.4 is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column. Table 13.4 Price Quantity Supplied If Firm Quantity Demanded Quantity Supplied Also Receives Social Benefits 15 800 500 710 16 740 540 740 17 680 580 770 18 620 620 800 19 560 660 830 20 500 700 860 If the firm were to receive a price based only on private benefits, the equilibrium price and quantity would be O $16,740 $17,680 $18,620 $19,660The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatricians' visits (D₁), and three alternative subsidies, represented by curves D2, D3. and D4- Price (S) 240 220- 200- 180- 160- 140- 120- 80- 60- 40- 20- 0 Quantity of pediatrician visits D₂ reset D₂ D₂ 50 100 150 200 250 300 350 400 450 500 D₁ D₂ a. Assume that the correct level of subsidy is D3. Compared to the efficient outcome, graph the loss in total surplus that would result from subsidies D₂ and D4 Instructions: Use the tools provided (D₂ and D4) to draw the loss in total surplus for each subsidy. b. The socially optimal level of pediatrician visits is 350 visits.QUESTION 1: The Chief Medical Officer has advised the government that consumption of widget-corn improves the survival rate of COVID-19 by 20%. Suppose the supply and demand functions for widget-corn are:QD = 100 – 5P (1) QS = 5P. (2) P is the price in dollar and Q is the quantity in kilograms. a. Determine the market equilibrium price and quantity of widget-corn? b. Calculate the consumer surplus, producer surplus, and total economic surplus at the market equilibrium. c. Having confirmed the positive impact of widget-corn consumption on COVID-19 patients, the government has ordered widget-corn sellers to charge $5 per kilogram. (i). What type of price regulation policy? Briefly explain. (ii). Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. (iii) Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. (iv) Is the outcome of the government’s policy efficient and, therefore, maintained or abandoned?…
- The local government has decided that because children's health has large external benefits, it will offer a subsidy to help familles pay for visits to the pediatrician. However, the government Isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatricians' visits (D), and three alternative subsidies, represented by curves D2, D3, and D4. 0 Price (5) 240 220 200 180 160 140 120 100 80 60 40 20 D 50 100 150 200 250 300 350 400 450 500 Quantity of pediatrician visits Tools A Da O (A) D₂ a. Assume that the correct level of subsidy is D3. Compared to the efficient outcome, graph the loss in total surplus that would result from subsidies D₂ and D4- Instructions: Use the tools provided (D₂ and Da) to draw the loss in total surplus for each subsidy b. The socially optimal level of pediatrician visits is visits,The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatricians' visits (D1), and three alternative subsidies, represented by curves D2, D3 and D4. a. Assume that the correct level of subsidy is D3. Compared to the efficient outcome, graph the loss in total surplus that would result from subsidies D2 and D4. b. The socially optimal level of pediatrician visits is __ visits.The Chief Medical Officer has advised the government that consumption of widget-corn improves the survival rate of COVID-19 by 20%. Suppose the supply and demand functions for widget-corn are:QD = 100 – 5P (1)QS = 5P. (2)P is the price in dollar and Q is the quantity in kilograms.a. Determine the market equilibrium price and quantity of widget-corn? Calculate the consumer surplus, producer surplus, and total economic surplus at the market equilibrium. Having confirmed the positive impact of widget-corn consumption on COVID-19 patients, the government has ordered widget-corn sellers to charge $5 per kilogram.(i) What type of price regulation policy is this? Briefly explain. (ii) Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. (iii) Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. (iv) Is the outcome of the government’s policy efficient and, therefore, maintained or abandoned? Explain in detail. d.…
- Please answer part (d) only A steel mill, S, produces 20 tons of water pollution for every 100 tons of steel it produces. The downstream village of Watertown (WT) spends $150 per ton of water pollution from S to eliminate its environmental harm . S is a price taker in an international market where the demand for steel is p = 100 – 3X and the market supply of steel is p = 40 + 3X. X is in units of one (1) million tons per day and p is the price in dollars per ton of steel. S has a daily increasing marginal cost of production function, MC = x. S's Total Cost function = x*x/2 where x is S’s daily output. (a) If S has no legal liability for its pollution, what is S’s daily production of steel? How does your answer here relate to the concept of private efficiency? (b) WT wants to bargain with S to reach an optimal agreement on this pollution. Assuming S is still not legally liable for its pollution and both S and WT do not use lawyers, would there be an agreement? How does yo ur answer here…One of the pandemic measures adopted by the city of Regina consists of a food-delivery fee cap (maximum fee) of 14% of the pre-tax order price. This fee is charged by delivery services such as Uber Eats, DoorDash, and Skip the Dishes. Some restaurants in the city argue that the cap (in percentage terms) is to high due to the small profits earned in this industry. Represent graphically the equilibrium in the market for food (restaurants) in the city in the absence of any interventionsMany studies on rats and mice have established that charred meat grilled over hot coals causes cancer. Since the government cannot easily regulate home cooking methods, an alternative method has been proposed to discourage the consumption of barbecued meat. The proposal is to place a 100 percent tax at the retail level on charcoal briquets. Suppose the daily demand for charcoal was P= 100-Q/10 and the supply was P= 1 + Q./100 where P is in dollars per bag and Q is the number of 20 lb bags of charcoal sold weekly. a. What is the before and after - tax price of charcoal? b. Graph and show the deadweight loss due to the tax c. Why might this deadweight loss over estimate the loss to society from this tax?
- Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domesticdemand for coffee is:Qd = 500 − 2pand the domestic supply of coffee is:Qs = −150 + 3p(a) Suppose Krakozhia is closed to trade with the rest of the world. Determine the equilibrium price andquantity.(b) Draw a graph showing the domestic supply and demand from (a). Label all axes and curves and markout intercepts and equilibrium values. Shade and label areas for the consumer and producer surplus.(c) Calculate the consumer, producer, and total surplus. from (a).(d) Suppose Krakozhia is open to trade and the world price is 150. Determine the domestic quantity supplied,domestic quantity demanded, and the quantity exported.(e) Draw a graph showing the domestic supply and demand and world price from (d). Label all axes andcurves and mark out intercepts and relevant values. Shade and label areas for the consumer and producersurplus.(f) Calculate the consumer, producer, and total surplus…If quotas lead to an increase in prices, people may be constrained to reduce their consumption of thecommodity subject to quotas or some other commodities. True False(2) In a fictitious town of Fruitlandia, 4 individuals each buy apricots following their individualdemands P = 6 – Q and 1 individual buys following individual demand P = 11 – Q, where Pdenotes the price and Q denotes the quantity. For the price range between $0 to $6, the town’saggregate demand is given by(a) P = 35 – 5Q(b) P = 17 – 2Q(c) P = (17/2) – (Q/2)(d) P = 7 – (Q/5)(e) None of the above