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: Q° = 100 - 5P (1) Q$ = 5P. Pis the price in dollar and Q is the quantity in kilograms. (2) 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) (ii) (iii) (iv) What type of price regulation policy is this? Briefly explain. Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. Is the outcome of the government's policy efficient and, therefore, maintained or abandoned? Expiain in detail.

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: Q° = 100 - 5P (1) Q$ = 5P. Pis the price in dollar and Q is the quantity in kilograms. (2) 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) (ii) (iii) (iv) What type of price regulation policy is this? Briefly explain. Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. Is the outcome of the government's policy efficient and, therefore, maintained or abandoned? Expiain in detail.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

AFDETAILS WANEFMAC7 12.6.007. The consumer demand equation for tissues is given by q - (105- p), where p is the price per case of tissues and q is the demand in weekly sales. (a) Determine the price elasticity of demand E when the price is set at $34. (Round your answer to three decimal places.) E- Interpret your answer. The demand is going 2 V by % per 1% increase in price at that price level. (b) At what price should tissues be sold to maximize the revenue? (Round your answer to the nearest cent.) (c) Approximately how many cases of tissues would be demanded at that price? (Round your answer to the nearest whole number.) cases per week
2. The market demand function for strawberries is given by the equation: Q=276 2.5Pstr +0.6 I - 0.7 Pcr, str Where is the demand for strawberries in kilograms, Pstr is the price of strawberries per kilogram (in USD), str I is the household monthly income (in USD), and P is the price of cream per kilogram (in USD). Assume that Pstr is equal to $8, I is equal to $150, and Per is equal to $5. a. Determine the price elasticity of demand for strawberries. b. Determine the income elasticity of demand for strawberries. Is strawberry a normal/inferior good? Why? d. c. Determine the cross-price elasticity of demand for strawberries with respect to the price of cream. Based on your answer from (c), can we say cream and strawberries are substitute goods/ or complement goods? Why? Assume that the prices of strawberries and cream remain constant, but income increased three fold. What is going to happen on the demand for strawberries? Please use a diagram to provide your explanation. e.
The demand for a commodity generally decreases as the price is raised. Suppose that the demand for oil (per capita per year) is D(p)=1000//p barreis, where p is the price per barrel in dollars. Find the demand when p=55. Estimate the decrease in demand if p rises to 56 and the increase in demand if p is decreased to 54. The demand D(55)= The decrease in demand =? barrels. The increase in demand =? barrels.
All other things equal, if an individual earning $100,000 per year has an income elasticity of demand for health care of 0.4, if her salary increases by 10%, her expenditures on health care will increase by $4,000. True False
Provide the demand and supply analysis of Covid-19 vaccines for Developed countries
Suppose you are collecting data from a country like Japan where the government sets the price of healthcare. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 are displayed in the table below. Region Outpatient Visits per Month Price per Visit Tokyo 1.25 25 Hokkaido 1.75 15 (4 points) What is the arc price elasticity of demand for health care consumers in Japan (using only these data)? (4 points) Suppose that incomes are generally much higher in Tokyo than Hokkaido. Is your answer to the last question an overestimate or underestimate of price elasticity? Justify your answer. (c) (4 points) Using your estimated elasticity, what would the demand for health care be if the price in Tokyo were raised to 30 per visit? What would the demand in Hokkaido be if the price were lowered to 5 per visit?
Discuss what is known about price elasticities of demand for various health care services
The Inflation Reduction Act allowed Medicare to negotiate the price of all drugs in its formulary True False
Comment on the elasticity of demand for medicine
A person lives for 3 years with a disease and the current standard of care for that disease means he/she lives with a utility level of 0.7 . If that person takes a new medicine (Medicine A) because of which his/her utility level increases to 0.8, If another new medicine (Medicine B) prolongs the patient’s life by 2 years, at a utility level of 0.7,-Calculate the new QALY
With the COVID-19 epidemic, the demand for ethyl alcohol, which is very important in terms of meeting the need for hygiene, has also increased and the insufficient supply caused the price of ethyl alcohol to rise suddenly. During this period, the price of ethyl alcohol per liter rose to 400 TL, which caused a serious increase in all disinfectant prices, including cologne. The government, which wanted to prevent the consumer from being victimized, limited the price of ethyl alcohol per liter to 150 TL and banned the sale in the market above this price. If supply cannot be increased, what is the result of this government's implementation? Briefly explain.
16 Eradication of a disease with a vaccine subsidy. A terrible disease called fictitia is ravaging the woebegone nation of Pcoria. Fortunately, government scientists have just discovered the formula for an effective vaccine. Given current raw material prices, it costs $10 to produce each dose of vaccine. Assume that Pcoria has 100 citizens, and that the demand for vaccine in the first time period is Q=100 where P is vaccine price and y is disease prevalence. a Assume a competitive vaccine manufacturing market and a disease prevalence of 20% (y = 0.2). How many citizens demand the vaccine this period? b After this initial round of vaccinations, demand for the vaccine plummets because many citizens have been vaccinated and do not need another vaccine. Among the unvaccinated population, demand is now P Q= 50 – The fictitia outbreak has slowed down considerably but the prevalence is still ris- ing. Now assume y=0.25. How many unvaccinated citizens will demand vaccine this period? c The…