{"id":426691,"date":"2018-09-22T04:41:31","date_gmt":"2018-09-22T04:41:31","guid":{"rendered":"https:\/\/acemystudy.com\/?p=3779"},"modified":"2018-10-24T08:37:58","modified_gmt":"2018-10-24T08:37:58","slug":"economics-question-and-answer-concerned-about-the-political-fallout-from-rising-gas-prices","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/economics-question-and-answer-concerned-about-the-political-fallout-from-rising-gas-prices\/","title":{"rendered":"Economics Question and Answer: Concerned about the political fallout from rising gas prices,"},"content":{"rendered":"

 <\/p>\n

Question 1 (1.5 points) <\/strong><\/p>\n

Concerned about the political fallout from rising gas prices, suppose that the U.S. government imposes a price ceiling of $3.00 a gallon on gasoline.<\/p>\n

    \n
  1. (1 point) Explain how the market for gasoline would react to this price ceiling if a global shortage of oil sent the equilibrium price of gasoline to $3.50 a gallon.<\/li>\n
  2. (0.5 point) Would the U.S. gasoline market be efficient?<\/li>\n<\/ol>\n

    \u00a0<\/strong><\/p>\n

    Question 2 (2 points) <\/strong><\/p>\n

    The figure below shows the car market in Mexico when Mexico places no restriction on the quantity of cars imported. The world price of a car is $10,000.<\/p>\n

     <\/p>\n

    If the government of Mexico introduces a $2,000 tariff on car imports, what will be the price of a car in Mexico, the quantity of cars produced in Mexico, the quantity imported into Mexico, and the government\u2019s tariff revenue?<\/p>\n

    \u00a0<\/strong><\/p>\n

    Question 3 (2 points) <\/strong><\/p>\n

    The figure below shows the short-run cost curves of a toy producer. The market has 1,000 identical producers and the table shows the market demand schedule for toys.<\/p>\n

    \u00a0 <\/strong><\/p>\n

    \u00a0<\/strong><\/p>\n

    At a market price of $21 a toy, what quantity does the firm produce in the short run and does the firm make a positive economic profit, a zero economic profit, or an economic loss?<\/p>\n

     <\/p>\n

    Question 4 (2 points) <\/strong><\/p>\n

    Big Top is the only circus in the nation. The table sets out the demand schedule for circus tickets and the cost schedule for producing the circus.<\/p>\n

    Calculate Big Top\u2019s profit-maximizing price, output, and economic profit if it charges a single price for all tickets.<\/p>\n

     <\/p>\n

    Question 5 (2.5 points) <\/strong><\/p>\n

    AT&T and Verizon have two pricing strategies: Set a high (monopoly) price or set a low (competitive) price. Suppose that if they both set a competitive price, economic profit for both is zero. If both set a monopoly price, AT&T makes an economic profit of $100 million and Verizon makes an economic profit of $200 million. If AT&T sets a low price and Verizon sets a high price, AT&T makes an economic profit of $200 mil- lion and Verizon incurs an economic loss of $100 million; if AT&T sets a high price and Verizon sets a low price, AT&T incurs an economic loss of $50 million and Verizon makes an economic profit of $250 million.<\/p>\n

      \n
    1. (1.5 points) <\/strong>Create the payoff matrix for this game.<\/li>\n
    2. (1 point) <\/strong>What is the equilibrium of this game? Is the equilibrium efficient?<\/li>\n<\/ol>\n

       <\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

        Question 1 (1.5 points) Concerned about the political fallout from rising gas prices, suppose that the U.S. government imposes a price ceiling of $3.00 a gallon on gasoline. (1 point) Explain how the market for gasoline would react to Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-426691","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/426691","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=426691"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/426691\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=426691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=426691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=426691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}