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  3. Liberty ECON 213 Problem Set Ch. 6 Answers Complete Solutions

Liberty ECON 213 Problem Set Ch. 6 Answers Complete Solutions

 

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Please read the article below and use the information in the article to answer this question.

Let D1 represent the demand curve for premium seats to the Broadway hit Hamilton, and let S1represent the supply curve for these seats. If the producers of the show charge $497.50 for a premium seat, the scalpers will charge (a) , which is (b) https://sw5.wwnorton.com/problemsets/images/blank.png more than the price listed at the theater’s box office.

If the theater starts to charge $796.25 for these seats, the theater will sell (a) premium seats a week. Scalpers will charge (b) , which is (c) more than the price listed at the theater’s box office.

If the theater starts to charge $995 for premium seats, scalpers (a)

Choose one:

When the box office does sell premium tickets for $995, the box office will sell (b) premium tickets a week.

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Currently, the theater charges $497.50 for premium seats, and at this price, there is a substantial amount of excess demand, as shown in the graph below. Scalpers buy these tickets and resell them for a much higher price. Seeing the huge profits that scalpers have made, the theater is considering doubling the price of premium tickets to $995. Suppose that the demand curve and the supply curve for premium seats intersect at this new price of $995 so that there is no longer any excess demand. Some people will benefit from this change and others will not. Below is a list of groups of people mentioned in the article who are involved with the show in some way. Move the groups that benefit from the theater’s price increase to the box labeled “Better Off” and move the groups that are not made better off by the price increase to the box labeled “Not Made Better Off.”

Groups (5 items) (Drag and drop into the appropriate area below)

When the government imposes a binding price ceiling on loaves of bread, producers will want to supply (a) bread and consumers will demand (b) bread. Therefore, a binding price ceiling will lead to a (c) of bread.

The price ceiling will have other effects as well. The size of a loaf of bread and the quality of bread would (d) . Although the consumers lucky enough to buy bread would pay a lower price, their opportunity cost of buying bread would (e)

The price ceiling would also cause other changes over time. In the long run, the demand for and supply of bread becomes (f) elastic, leading to a (g)

Imagine that your city decides to enact a rent-control law that limits the price of a one-bedroom apartment to $ 700 per month. Using the table below, answer the following questions.

What is the market price without rent control?

How many one-bedroom apartments will be rented after the rent control law is passed?

The graph above shows the market for gasoline after the government imposes a price ceiling of $3.50 a gallon. With the price ceiling in place, the amount of gas that people would want in this market would be gallons, but the gas station owners are willing to supply only gallons.

Which of the following are likely to occur in this market?

The table below gives information on bottled water in Florida. As you would expect, the demand for water is higher than normal during a hurricane.

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