Use the following graph to answer the group of questions please and thank you:
1) What is the equilibrium price for lawn mowers?
2) What is the equilibrium quantity of lawn mowers?
3) What is the value of the maximum gains from trade?
4) Assume that there are 1800 units produced and purchased (this could be the result of a government subsidy for lawn mowers). What is the value of wasted resources?
5) What is the value of consumer surplus if a price ceiling of $40 is put in place?
6) If a price floor of $320 is put in place, what is the magnitude of the result that is the answer to the previous question?
7) If a price ceiling of $220 is put in place, what is the quantity of lawn mowers that will be sold in the market?
8) Assume lawn mowers are a normal good. Which of the following could result in an equilibrium price and quantity of $40 and 1800 lawn mowers?
A) increase in income
B) decrease in labor for lawn mower producers
C) increase in the price of lawn mowing services
D) decrease in income
9) Assume lawn mowers are a normal good. Which of the following could result in an equilibrium price and quantity of $80 and 400 lawn mowers?
A) a $100 subsidy for lawn mower production
B) increase in the price of lawn mowing services
C) decrease in income
D) increase in labor costs for lawn mower producers
10) If a price floor of $320 is put in place, what is the value of wasted quality improvements in lawn mowers?
11) If a price ceiling of $80, is put in place, what is the value of the deadweight loss?