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Sauron [17]
3 years ago
14

Identify the equilibrium price and quantity of blueberries before the introduction of a price ceiling. Identify and quantify the

effect of imposing a price ceiling at $5 per gallon on: 1) the quantity of blueberries that get bought and sold, 2) any existing shortage or surplus of blueberries, 3) consumer surplus, 4) producer surplus, and 5) total surplus. Be careful to put your answers in the correct units.

Business
1 answer:
Setler79 [48]3 years ago
7 0

Answer: See attached file

Explanation:

a) At equilibrium, demand equals supply where the price is $6 and quantity traded is 80 units.

Consumer surplus before price ceiling is area of triangle of A6E whose area is (1/2) * (80 - 0) * (14 - 6) = 320

Producer surplus before price ceiling is area of triangle of 26E whose area is (1/2) * (80 - 0) * (6 - 2) = 160

Total surplus before price ceiling = consumer surplus + producer surplus = 320 + 160 = 480

b) At a price of $5 (price ceiling) where demand = 90 units while supply = 60 units causes shortage of 90 - 60 = 30 units in the market.

Consumer surplus after price ceiling is area of triangle A8G + area of rectangle 85DG whose sum is (1/2) * (14 - 8) * (60 - 0) + (60 - 0) * (8 - 5) = 180 + 180 = 360

Producer surplus after price ceiling is area of triangle 5DC whose sum is (1/2) * (60 - 0) * (5 - 2) = 90

Deadweight loss after price ceiling of triangle GDE whose sum is (1/2) * (80 - 60) * (8 - 5) = 30

Total surplus is consumer surplus + producer surplus after price ceiling = 360 + 90 = 450

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Theory of production​
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Answer:

Theory of production, in economics, an effort to explain the principles by which a business firm decides how much of each commodity that it sells (its “outputs” or “products”) it will produce, and how much of each kind of labour, raw material, fixed capital good, etc., that it employs (its “inputs” or “factors of .

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3 0
2 years ago
The manufacturing overhead account is debited when ______.
Rufina [12.5K]

Production process involves different type of cost and expenses, manufacturing overhead account is one and it is debited when overhead applied is less than the actual overhead costs incurred.

<h3>What is manufacturing overhead cost?</h3>

It is the sum of all the indirect costs that were spent while manufacturing a product.

The amount in the manufacturing overhead account can either be a debit or credit.

It is a debit when the overhead is less than the actual overhead costs that were spent.

Therefore, The manufacturing overhead account is debited when the overhead applied is less than the actual overhead costs incurred.

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5 0
2 years ago
What are the three types of economic resources? Give an example of each type of resource.
fiasKO [112]

"The three types of economic resources are also referred to as factors of production. Land (including all natural resources), Labor (including all human resources), Capital (including all man-made resources), and when you combine all of those you get production. "


8 0
3 years ago
Read 2 more answers
2) Economic Growth: Use the PPF from above to illustrate the effects of saving and investment upon national GDP. Use a PPF to sh
Inessa [10]

Answer and Explanation:

Economic Growth can be defined as an increment in production capacity of an economy using all its available resources. The PPF illustrates the largest possible quantity of goods and services a nation can produce base on its available resources. An outward shift in the economy’s production possibility frontier (PPF) depicts  a raise in productive capacity of an economy.  An outward shift implies that an economy has capacity to  increase its production outputs. This can be as a result of   the economy employing new technology, allowing specialization, increasing its labour force, using new production approaches etc. Likewise, an inward shifting PPF implies an economy has witness a loss or exhaustion of some of its scarce resources and it will culminate into reduction in an economy’s productive potential.

Effects of saving and investment upon national GDP

level of savings direct related to the level of investment, investment feeds on available finance from saving. If more people save, the banks will be able  to lend more to firms to support their investments.

low savings and investment implies a PPF inward shift. low savings  in economy implies that the economy is opting for short-term consumption over long-term investment, and this will lead to future undue pressure on available infrastructures ad resources.

spending  on consumer goods vs capital goods effect on the economy

In the short run, the economy must prefer using available resources to produce capital rather than consumer goods. Standards of living will be affected, as private consumption will have access to fewer resources. However, in the longer run, the raised production of capital goods will boost  the production of more consumer goods ad therefore standards of living will experience more increase than they would have witness if the economy had spent most of its income on consumer goods.

6 0
3 years ago
The law of increasing costs warns us that as demand increases, the cost of the product increases. as the cost of production incr
givi [52]

Answer: c). according to the ppf, as we produce more of one product, eventually we have give up more and more of the other product.

Explanation: PPF shows all possible combination of goods that a country can produce with its limited resources. The slope of a PPF is the opportunity cost which shows the units of goods that must be sacrificed to gain more and more units of the other good. As we move down the PPF the opportunity cost increases. This means that <em>more and more units of a good must be sacrificed to gain additional units of the other good</em>.

7 0
3 years ago
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