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Consider a market characterized by the following demand and supply curves: Qd = 1600 - 20p and Qs = - 900 + 30p
(a) Characterize the market equilibrium.
(b) If regulators decide to restrict payments by setting a price ceiling equal to $35, how many units will be sold or bought?
(c) Calculate the change in producer's surplus.
(d) Calculate the deadweight loss of the price ceiling.
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Calculate and graph what happens to G, AD, GDP, and Prices if the government increases government spending by 100 billion and the MPC = .80. Calculate and graph what happens to T, C, AD, GDP, and Prices if the President raises taxes by 100 billion an..
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