Changes

When price P is fixed by the government at $.75, then what is the corresponding Q supply and demand?  Looking at the table, the corresponding Q in the supply column is 20 gallons, and the corresponding Q in the demand column is 40 gallons.  The lower number is what matters, because nothing can be bought unless it is both supplied and demanded.  So the supply is 20 gallons and that is what is sold at $.75 per gallon.  That is 20 times 0.75 = $15 per person, or $15,000 for the whole town.  Some may try to buy and sell gas illegally at a higher price, as illegal markets often develop when there are price controls.

When price P is fixed by the government at $.75, then what is the corresponding Q supply and demand?  Looking at the table, the corresponding Q in the supply column is 20 gallons, and the corresponding Q in the demand column is 40 gallons.  The lower number is what matters, because nothing can be bought unless it is both supplied and demanded.  So the supply is 20 gallons and that is what is sold at $.75 per gallon.  That is 20 times 0.75 = $15 per person, or $15,000 for the whole town.  Some may try to buy and sell gas illegally at a higher price, as illegal markets often develop when there are price controls.

5. Suppose the government limits the supply of Toyota cars that can be imported in 2008 to a certain quota.  What effect does this have on the supply curve, and on the equilibrium price?  Who is helped by this import quota, and who is hurt?  Be as specific as possible.

'''5. Suppose the government limits the supply of Toyota cars that can be imported in 2008 to a certain quota.  What effect does this have on the supply curve, and on the equilibrium price?  Who is helped by this import quota, and who is hurt?  Be as specific as possible.'''

'''Import quotas cause the supply curve to shift upward, and for the equilibrium where supply meets demand to shift to less quantity at a greater price.  the consumers are hurt by import quotas, and everyone pays more for the cars and some people who wanted the car at its lower, free market price, cannot buy it at the higher price.  Sellers of Toyota cars are helped because they make bigger profits per car sold, although they cannot sell as many as before.'''

Import quotas cause the supply curve to shift upward, and for the equilibrium where supply meets demand to shift to less quantity at a greater price.  the consumers are hurt by import quotas, and everyone pays more for the cars and some people who wanted the car at its lower, free market price, cannot buy it at the higher price.  Sellers of Toyota cars are helped because they make bigger profits per car sold, although they cannot sell as many as before.

6. Suppose you went to see the opening of your favorite new movie, but it is sold out.  However, there are four independent scalpers are (illegally) reselling their tickets outside.  Four strangers are each willing to pay the scalpers at most $15, $10, $9 and $8 for a ticket.  The scalpers are initially willing to sell each of their tickets for at least $7, $8, $9, and $12.  The eight of you get together and bargain, and then tickets are sold at a common price.  What is the price and how many tickets sell at that price?  Should scalping be illegal in New Jersey?

'''6. Suppose you went to see the opening of your favorite new movie, but it is sold out.  However, there are four independent scalpers are (illegally) reselling their tickets outside.  Four strangers are each willing to pay the scalpers at most $15, $10, $9 and $8 for a ticket.  The scalpers are initially willing to sell each of their tickets for at least $7, $8, $9, and $12.  The eight of you get together and bargain, and then tickets are sold at a common price.  What is the price and how many tickets sell at that price?  Should scalping be illegal in New Jersey?'''

'''One customer (C1) is willing to pay $15. Another customer (C2) is willing to pay $10. Likewise, customers C3 will pay $9 and C4 will pay $8.

One customer (C1) is willing to pay $15. Another customer (C2) is willing to pay $10. Likewise, customers C3 will pay $9 and C4 will pay $8.

One scalper (S1) scalper willing to sell for $7, scalper S2 will sell at $8, S3 will sell at $9, and S4 at $12.

<br>One scalper (S1) scalper willing to sell for $7, scalper S2 will sell at $8, S3 will sell at $9, and S4 at $12.

C1, C2, and C3 will all be willing to buy tickets from S1, S2, and S3 at $9.  S4 is not willing to sell at the price, and C4 is not willing to buy at the that price, so both choose not to deal.  Three tickets are thus sold at the "common price" or market price of $9 each.'''

<br>C1, C2, and C3 will all be willing to buy tickets from S1, S2, and S3 at $9.  S4 is not willing to sell at the price, and C4 is not willing to buy at the that price, so both choose not to deal.  Three tickets are thus sold at the "common price" or market price of $9 each.

'''Scalping is a form of free market activity.  If there are willing buyers and sellers for the tickets, then why interfere with these sales?  Scalping is illegal in New Jersey, but still happens illegally.'''

Scalping is a form of free market activity.  If there are willing buyers and sellers for the tickets, then why interfere with these sales?  Scalping is illegal in New Jersey, but still happens illegally.

'''Honors''':  Write an essay of about 300 words total on one or more of the following topics:

'''Honors''':  Write an essay of about 300 words total on one or more of the following topics: