The advantage of having a $8 price floor instead of an $8 tax is that there will always be less deadweight loss, and hence less inefficiency in the market with the price floor.

Consider the following facts: AI chips and lithium batteries are complements. The cross-price elasticity of AI chips is 1.25. We know that the price of Lithium batteries falls by 20 percent. By how much does the quantity demanded of AI chips change? Note: no need to use the Midpoint formula.

What is consumer surplus in this market?

Suppose that at the same time that Malta begins trading with the rest of the world, a tariff of $2 per pencil is imposed on import in Malta. The total tariff revenue collected will equal:

__________ has the comparative advantage in Potions and ___________ has the comparative advantage in Spells.

Suppose that a famous rock band is deciding how much to charge for the tickets to their new concert. For their last performance, the band charged $60 per ticket and they sold 10 thousand tickets. The band estimates that the price elasticity of demand is 1.2. If they are correct, which of the following prices should they charge per ticket so that they can obtain a higher revenue?

What is the change in Malta’s total surplus from opening up to trade with the rest of the world?

What is consumer surplus in the market?

What is the change in Malta’s producer surplus from opening up to trade with the rest of the world?

Refer to the following table for questions 9-10. Reservation Prices and Costs in a small market for AI Chips Name of Consumer Reservation Price for 1 AI Chip (dollars)   Name of Seller Reservation Price for 1 AI Chip (dollars)  Alice 9   Apples 1 Ben 8   Bell 2 Carol 7   Chrome 3 Daniel 6   Dell 4 Ellen 5   Envy 5 Francis 4   Frost 6 Gwen 3   Groove 7 Hugo 2   HP 8 Ivonne 1   Intel 9 Jaimie 0   Jolt 10