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

Calculating impact of a subsidy - numerical

Assume a linear demand function of the form:

Qd = 160 - 10P

and a linear supply curve of the form:

Qs = -40 + 15P

Using these demand and supply functions, answer the following questions.

Question 1

Calculate the quantities demanded and supplied for prices from $1 - $15.

Question 2

Plot these figures to give the demand and supply curves for the product.

Question 3

Using simultaneous equations, calculate the equilibrium price and output.

Question 4

If the government gives a subsidy per unit of $5, plot the new supply curve on the original supply and demand diagram. Use the diagram to find out the new equilibrium price and quantity.

Question 5

Calculate the amount spent by the government on the subsidy.

Question 6

Calculate the revenue received by the firms:

1. before the subsidy
2. after the subsidy

Question 7

Calculate consumer expenditure:

1. before the subsidy
2. after the subsidy