Microeconomics

Table of Contents

1. Topic pack - Microeconomics - introduction
2. 1.1 Competitive Markets: Demand and Supply
3. 1.1 Competitive Markets: Demand and Supply - notes
4. 1.1 Competitive markets - questions
5. 1.1 Competitive markets - simulations and activities
6. 1.2 Elasticities
7. 1.2 Elasticities - notes
8. Section 1.2 Elasticities - questions
9. Section 1.2 Elasticities - simulations and activities
10. 1.3 Government intervention
11. 1.3 Government Intervention - notes
12. 1.3 Government intervention - questions
    1. Markets - essay
    2. Price controls - short answer
    3. Price controls - numerical (1)
    4. Price controls - numerical (2)
    5. Calculating impact of a tax - numerical
    6. Calculating impact of a subsidy - numerical
    7. Agricultural markets - essay
    8. Cheap petrol
    9. World's food system is broken
    10. China plans price controls to curb inflation
    11. Bolivian fuel shortages
    12. Japanese rice subsidies
    13. Coffee shortages in Venezuela
13. 1.3 Government intervention - simulations and activities
14. 1.4 Market failure
15. 1.4 Market failure - notes
16. Section 1.4 Market failure - questions
17. Section 1.4 Market failure - simulations and activities
18. 1.5 Theory of the firm
19. 1.5 Theory of the firm - notes (HL only)
20. Section 1.5 Theory of the firm - questions
21. Section 1.5 Theory of the firm - simulations and activities
22. Print View

Price controls - numerical (2)

Question 1

If demand can be shown by a linear demand function of the form Qd = 35 - 2P and supply can be shown by a linear supply function of Qs = -20 + 4P, calculate the quantities demanded and supplied at prices between $1 and $15.

The government puts in place a price floor of $8 per unit.

Question 2

What will be the excess supply in the market as a result of the price floor?

Question 3

Calculate consumer expenditure:

1. Before the price floor was imposed.
2. After the price floor was imposed.

Question 4

Calculate the firm's revenue (assuming the government purchases the surplus):

1. Before the price floor was imposed.
2. After the price floor was imposed.

Question 5

Calculate the amount the government will need to spend to purchase the surplus that arises as a result of the price floor.