19 Assume that Qd402P and Qs2P20 If the government limits th

19. Assume that Qd·40-2P and Qs-2P-20. If the government limits the quantity sold to Q-8, what is the loss to the economy? a. There is no loss to the economy because Q 10 is greater than the equilibrium quantity. b. $150 C. $200 d. $37.50 e. $2.00

Solution

19. $2.00 (Explanation: Q_d will be 8 when P = 16 and Q_s will be 8 when P = 14. so, the difference is 2)

12. d. Equilibrium price will increase

13. c. - 0.33   [Explanation: (-2/25000) * 75000/18)]

20. b. $9 (Explanation: (8 x1) + 1)

21. c. Supply increased