KAPLAN BU224 FULL COURSE [ ALL DISCUSSIONS AND ALL ASSIGNMENTS ]

Unit 1: Beginning Principles – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264977&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Please take this opportunity to introduce yourself and to learn something about each other. Then address the Discussion topic after you have completed your Reading.The Wealth of NationsTopicsTotal (#unread)The Wealth of Nations124 responses (116 unread)Think of the last two major things you bought.Why did you buy them? What were your opportunity costs in making the purchase? What would have been the opportunity cost, if you had NOT made the purchase? (Not all opportunity costs are measured in money.)Did those selling them to you provide the goods because they cared about your needs? What was their REAL motivation?When you go to work, why do you “sell” your labor to that organization? Do you really care what the owner of the organization really wants?How do questions b. and c. relate to Adam Smith’s statement from The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that you expect our dinner, but from their regard to their own interest? We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”Unit 2: Scarce Resources and Trade – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264980&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Scarcity Solutions77 responses (69 unread)Do some research on the country of Ethiopia and discuss:Who in the Ethiopian society has the most difficult time dealing with scarcity?What do they need most?How can their society provide for their wants and needs?Why are they so impoverished?What can their governments do to help, or hinder their country’s development?Could not Ethiopia become a world class producer and exporter of goods? How would Ethiopia compare with Japan? Japan is a country relatively POOR in natural resources, yet it is an economic world powerhouse. What are the differences between the two countries?Unit 3: Supply and Demand – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264984&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Marijuana Legalization86 responses (80 unread)There is much discussion in the press about several states moving to legalizing marijuana, either for only medical purposes, or more extremely, for recreational purposes. Looking only at the economic impact (not moral implications) of such changes in the laws, discuss how the existing system of supply and demand for illegal marijuana will be changed with the new legalization.What will happen to existing supply avenues?Will legalization significantly change demand? How?Would one expect prices to change significantly? How?What would be the costs and benefits to governments, both in changes in enforcement requirements and in potential tax revenue?UNIT 4Unit 4: Consumer Choice and Utility Maximization – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264987&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Diminishing Marginal Utility81 responses (76 unread)Pretend that you have just been surprised with a genuine e-mail that says you have just been selected by your favorite pizza delivery company that every day for the next month you will receive your favorite pizza for lunch and another of that same favorite pizza for dinner, delivered to your home and ready to eat.Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning.What about your excitement on the 10th day?What about your excitement on the 30th day?Now, pretend that your favorite national brand gasoline company informs you that you have won as much as you want free gasoline, as much as you want, from any of their gas stations, anywhere in the country every day for a year.Using the concept of diminishing marginal utility, discuss how excited you will be on the first day of your winning.What about your excitement on the 10th day?What about your excitement on the 30th day?Again, considering the concept of utility, what makes these two scenarios different?Unit 5: Surplus – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264990&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Tailored Clothes82 responses (72 unread)Assume that you were ready to buy a custom tailored Dress (or men’s suit) and you are prepared to pay up to $200 for it. Also assume that the tailor is prepared to sell that item of clothing for as little as $100.When you arrive at the tailor shop, the posted price for the item is $150. Discuss how this scenario relates to producer and consumer surplus and how such surpluses, if any, affect buying and manufacturing decisionsDiscuss any recent purchases you have made and for which you feel that a similar rational seemed to be at work.Unit 6: Governmental Price Controls – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264994&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Discussion73 responses (61 unread)Critically analyze the pros and cons of putting a price ceiling on prescription medicine. Make sure to use concepts from both chapters seen this unit such as government intervention, inefficiencies, price elasticity, etc. in your answer.In the first case, assume the medication is for a life threatening illness for which your child has been diagnosed.In a second case, assume the medication is for an improved quality of life issue, such as achieving a healthy weight.What are the impacts that the pharmaceutical company that makes the medications in question will experience? How will that affect the pharmaceutical company’s production decisions? What about its decisions to conduct further research into new drugs?Unit 7: Fixed Costs and Variable Costs – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578264997&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Increase in Fixed Costs64 responses (55 unread)Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have on the following:the firm’s AFC (average fixed cost);the firm’s AVC (average variable cost);the firm’s ATC (average total cost); and,the firm’s MC (marginal cost)?What changes, if any, is there likely to be in these same cost CURVES?Unit 8: Cost Analysis and The Perfectly Competitive Market – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578265000&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Your Own Business65 responses (56 unread)Assume that you are going to start a small business of your own.Describe the business and, utilizing the concepts of this unit and the earlier units, discuss:what costs you would incur;what competition you might experience;how you would determine the price you would sell your product; and,how much product you would produce?Unit 9: Monopolies – Discussion.next.ecollege.com/%28NEXT%280a2e562585%29%29/Main/CourseMode/Thread/ListThreadsView_V2.ed?courseItemSubID=578265003&courseItemType=CourseContentItem&TopicID=0&#” title=”Print Preview”>Throughout this course, many discussion opportunities come up where you need to respond to other people’s opinions and comments. Then respond to your Discussion topic after you have completed your Reading.TopicsTotal (#unread)Real World Monopolies61 responses (50 unread)Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly.What characteristics of the industry make it a monopoly?What is the impact of the monopoly power on its customers?Why might government want to regulate natural monopolies?How might such regulation be structured?ASSIGNMENTSBU224 Unit 1 Assignment Template:Name: -Course Number: -Section Number: -Unit Number: – 1Date: ———————————– General Instructions for all Assignments———————————–1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:Course number_section number_LAST_FIRST_ unit number2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.4. Provide a list of references at the end of the last page of your assignment.5. Upload the completed assignment to the appropriate dropbox.6. Any questions about the assignment, or format questions, should be directed to your course instructor.——————————————- Career Competencies —————————————–In this assignment, you will engage in developing the following career competencies:Analyzing Quantitative DataAnalyzing Qualitative DataImproving Global Awareness——————————————- Assignment ——————————————-1. Liza needs to buy a textbook for the next economics class. The price at the college bookstore is $65. One online site offers it for $55 and another site, for $57. All prices include sales tax. The accompanying table indicates the typical shipping and handling charges for the textbook ordered online.Shipping methodDelivery timeChargeStandard shipping3–7 days$3.99Second-day air2 business days$8.98Next-day air1 business day$13.98a. What is the opportunity cost of buying online instead of at the bookstore? Note that if you buy the book online, you must wait to get it.b. Show the relevant choices for this student. What determines which of these options the student will choose?2. In August 2007, a sharp downturn in the U.S. housing market reduced the income of many who worked in the home construction industry. A Wall Street Journal news article reported that Wal-Mart’s wire-transfer business was likely to suffer because many construction workers are Hispanics who regularly send part of their wages back to relatives in their home countries via Wal-Mart. With this information, use one of the principles of economy-wide interaction to trace a chain of links that explains how reduced spending for U.S. home purchases is likely to affect the performance of the Mexican economy.3. During the Great Depression, food was left to rot in the fields or fields that had once been actively cultivated were left fallow. Use one of the principles of economy-wide interaction to explain how this could have occurred.——————————————–References:Unit _1_ Practice Assignment Grading RubricContentPercent PossiblePoints PossibleFull assignment100%40Overall Writing:20%8correct coversheet information at the top of 1st page5%2APA format for answers3%1correct citations3%1standard English no errors4%2At least ONE, or more, references5%2Answers: provides complete information demonstrating analysis and critical thinking:80%32Individual Questions:1.a. – Identify the relevant opportunity costs20%81. b. – Identify relevant choices and explain the decision process30%122. – Explain how a downturn in the American economy affects the Mexican economy15%63. – Explain why food rotted in the field during the Great Depression15%6BU224 Unit 2 Assignment:Name: -Course Number: -Section Number: -Unit Number: – 2Date: ———————————– General Instructions for all Assignments—————————————————————————— Assignment ——————————————-1. A representative of the American clothing industry recently made the following statement: “Workers in Asia often work in sweatshop conditions earning only pennies an hour. American workers are more productive and as a result earn higher wages. In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low – wage Asian clothing.”a. Which parts of this quote are positive statements? Which parts are normative statements?b. Is the policy that is being advocated consistent with the preceding statements about the wages and productivities of American and Asian workers?c. Would such a policy make some Americans better off without making any other Americans worse off? That is, would this policy be efficient from the viewpoint of all Americans?d. Would low – wage Asian workers benefit from or be hurt by such a policy?Instead of legislation banning the imports, assume that the government enacts a special tax on imported clothing that is so high that the selling price of the imports would be equal to the selling price of the same clothing made in America. This kind of tax is called a tariff and is enacted to protect domestic producers of the same items that can be imported at much lower costs. Answer the following:e. What would shoppers see when they shopped in Wal-Mart and the other “big box” stores that sell so many imported items?f. Would this tax policy have a better effect, worse effect, or no different effect on American workers than the legislation banning the imports discussed in question 1? What kind of effect would the tax have on the Asian workers?2. In the ancient country of Roma, only two goods, spaghetti and meatballs, are produced. There are two tribes in Roma, the Tivoli and the Frivoli. By themselves, the Tivoli each month can produce either 30 pounds of spaghetti and no meatballs, or 50 pounds of meatballs and no spaghetti, or any combination in between. The Frivoli, by themselves, each month can produce 40 pounds of spaghetti and no meatballs, or 30 pounds of meatballs and no spaghetti, or any combination in between.Examine the first diagram showing the monthly production possibility frontier for the Tivoli and the monthly production possibility frontier for the Frivoli.a. Which tribe has the comparative advantage in spaghetti production?b. Which tribe has the comparative advantage in meatball production?.jpg”>.jpg”>In A.D. 100 the Frivoli discover a new technique for making meatballs that doubles the quantity of meatballs they can produce each month. Examine the new monthly production possibility frontier for the Frivoli..jpg”>c. After the innovation, which tribe now has an absolute advantage in producing meatballs?d. Which tribe now has an absolute advantage in producing spaghetti?e. Which has the comparative advantage in meatball production?f. Which has the comparative advantage in spaghetti production?3. According to the U.S. Census Bureau, in July 2006 the United States exported aircraft worth $1 billion to China and imported aircraft worth only $19,000 from China. During the same month, however, the United States imported $83 million worth of men’s trousers, slacks, and jeans from China but exported only $8,000 worth of trousers, slacks, and jeans to China. Using what you have learned about how trade is determined by comparative advantage, answer the following questions.a. Which country has the comparative advantage in aircraft production? Which country has the comparative advantage in production of trousers, slacks, and jeans?b. Can you determine which country has the absolute advantage in aircraft production? which country has the absolute advantage in production of trousers, slacks, and jeans?——————————————–References:Unit 3 Assignment Template:——————————————- Assignment ——————————————-1. St Atanagio is a remote island in the Atlantic. The inhabitants grow corn and breed poultry. The accompanying table shows the maximum annual output combinations of corn and poultry that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for corn production, there are fewer resources available for breeding poultry.Maximum annual output optionsQuantity of Corn(pounds)Quantity of Poultry(pounds)11200021000300380050046006005400700620077570850Examine the following production possibility frontier graph with corn on the horizontal axis and poultry on the vertical axis illustrating these options and showing points 1–7..png”>a.Can St. Atanagio produce 650 pounds of poultry and 650 pounds of corn? Explain. Where would this point lie relative to the production possibility frontier?b.What is the opportunity cost of increasing the annual output of corn from 800 to 1000 pounds?c.What is the opportunity cost of increasing the annual output of corn from 200 to 400 pounds?d.Can you explain why the answers to parts c. and d. above are not the same? What does this imply about the slope of the production possibility frontier?2.Suppose that the supply schedule of Belgium Cocoa beans is as follows:Price of cocoa beans(per pound)Quantity of cocoa beans supplied(pounds)$40900$35700$30500$25400$20200Suppose that Belgium cocoa beans can be sold only in Europe. The European demand schedule for Belgium cocoa beans is as follows:Price of Belgium cocoa beans(per pound)European Quantity of Belgium cocoa beans demanded(pounds)$40100$35300$30500$25700$20900a.Below is the graph of the demand curve and the supply curve for Belgium cocoa beans. From the supply and demand schedules above, what are the equilibrium price and quantity of cocoa beans from Belgium?.jpg” alt=”Slide1″>Now suppose that Belgium cocoa beans can be sold in the U.S. The U.S. demand schedule for Belgium cocoa beans is as follows:Price of Belgium cocoa beans(per pound)U.S. Quantity of Belgium cocoa beans demanded(pounds)$40200$35400$30600$25800$201000b.What is the combined (total) demand schedule for Belgian cocoa beans that European and USA consumers buy?Price of Belgium cocoa beansU.S. Quantity of Belgium cocoa beans demandedEuropean Quantity of Belgium cocoa beans demandedTotal Demanded(per pound)(pounds)(pounds)(pounds)$40200100$35400300$30600500$25800700$201000900Below is the supply and demand graph that illustrates the new equilibrium price and quantity of cocoa beans from Belgium..jpg” alt=”Slide2″>c.From the supply schedule and the combined U.S. and European demand schedule, what will be the new price at which Belgium plantation owners can sell cocoa beans?d.What price will be paid by European consumers?e.What will be the quantity consumed by European consumers?——————————————–References:Unit 4 Assignment Template:Analyzing Qualitative Data——————————————- Assignment ——————————————-1. For each of the following situations, decide whether the bundle Lakshani is considering optimal or not. If it is not optimal, how could Lakshani improve her overall level of utility? That is, determine which good she should spend more on and which good should she spend less on.a.Lakshani has $200 to spend on sneakers and sweaters. Sneakers cost $50 per pair, and sweaters cost $20 each. She is thinking about buying 2 pairs of sneakers and 5 sweaters. She tells her friend that the additional utility she would get from the second pair of sneakers is the same as the additional utility she would get from the fifth sweater.b.Lakshani has $5 to spend on pens and pencils. Each pen costs $0.50 and each pencil costs $0.10. She is thinking about buying 6 pens and 20 pencils. The last pen would add five times as much to her total utility as the last pencil.c.Lakshani has $50 per season to spend on tickets to football games and tickets to soccer games. Each football ticket costs $10 and each soccer ticket costs $5. She is thinking about buying 3 football tickets and 2 soccer tickets. Her marginal utility from the third football ticket is twice as much as her marginal utility from the second soccer ticket.2.In the United States, 2007 was a bad year for growing wheat. And as wheat supply decreased, the price of wheat rose dramatically, leading to a lower quantity demanded (a movement along the demand curve). The accompanying table describes what happened to prices and the quantity of wheat demanded.20062007Quantity demand (bushels)2.2 billion2.0 billionAverage price (per bushel)$3.42$4.26a.Using the midpoint method, calculate the price elasticity of demand for winter wheat.b.What is the total revenue for U.S. wheat farmers in 2006 and 2007?c.Did the bad harvest increase or decrease the total revenue of U.S. wheat farmers? How could you have predicted this from your answer to part a?3. A recent study determined the following elasticities for Volkswagen Beetles:Price elasticity of demand = 2Income elasticity of demand = 1.5The supply of Beetles is elastic. Based on this information, are the following statements true or false? Explain your reasoning.a.A 10% increase in the price of a Beetle will reduce the quantity demanded by 20%.b.An increase in consumer income will increase the price and quantity of Beetles sold. Since price elasticity of demand is greater than 1, total revenue will go down.——————————————–Unit 5 Assignment Template:Name: -Course Number: -Section Number: -Unit Number: – 5Date: ———————————– General Instructions for all Assignments———————————–1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:Course number_section number_LAST_FIRST_ unit number2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.4. Provide a list of references at the end of the last page of your assignment.5. Upload the completed assignment to the appropriate dropbox.6. Any questions about the assignment, or format questions, should be directed to your course instructor.——————————————- Career Competencies —————————————–In this assignment, you will engage in developing the following career competencies:Analyzing Quantitative DataAnalyzing Qualitative Data——————————————- Assignment ——————————————-1. The accompanying table shows the price and yearly quantity sold of ice cream cones on Sidfield Island.Price of Ice Cream ConesQuantity of Ice Cream Cones Demanded$13000$22400$31600$4800Using the midpoint method (show your work), calculate the price elasticity of demand when the price of an ice cream cone rises from $1 to $2. What does this estimate imply about the price elasticity of demand for ice cream cones?Using the midpoint method (show your work), calculate the price elasticity of demand when the price of an ice cream cone rises from $3 to $4. What does this estimate imply about the price elasticity of demand for ice cream cones?Notice thatthe estimates from (a) and (b) above are different. Why do price elasticity of demand estimates change along the demand curve?2.Newspaper vending machines are designed so that once you have paid for one paper; you have access to all the papers in the machine and could take multiple papers at a time. However, other vending machines dispense only one item (the item you bought). You do not have access to all the goods (sodas, candy, snacks, etc.) at one time. Using the concept of marginal utility, explain why these vending machines differ?3.Amy is shopping at a dollar store. She is currently buying 5 bracelets that cost $1 each and 4 sodas that cost $1 each. The table below indicates the marginal utility she obtains when she purchases this combination.QuantityPrice per UnitMU per unitBracelets5$130Sodas4$140a. A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is this consumer maximizing her utility?b. If not, should she consume more bracelets or more sodas? Explain.Answer the following assuming that one more bracelet is purchased and one less soda is consumed:c. Recall the law of diminishing marginal utility. What happens to the Marginal Utility of bracelets and the Marginal Utility of soda?d. What happens to the Total Utility received?e. What happens to the total dollars spent?4. On Tuesday nights, a local restaurant has a kid’s meal special. Nina’s son, Braden likes the restaurant’s chicken nuggets, but Braden seems to be growing bigger every day and the kid’s meal is usually not enough. The restaurant does allow for additional purchase of chicken nugget servings. Nina’s willingness to pay for each serving is shown in the table below.Number of Chicken Nugget servings(servings)Willingness to pay for chicken nuggets(per serving)1$52$43$34$25$16$0a.If the price of an additional serving of chicken nuggets is $3, how many servings will Nina buy for Braden? How much consumer surplus does he receive?b.The following week, Nina and Braden are back at the restaurant again, but now the price of a serving of chicken nuggets is $4. By how much does his consumer surplus decrease compared to the previous week?c.One week later, they return to the restaurant again. Nina discovers that the restaurant is offering an “all-you-can-eat” special for $12. How many chicken nugget servings will Braden eat, and how much consumer surplus does he receive now?d.Suppose you own the restaurant and Braden is a “typical” customer. What is the highest price you can charge for the “all-you-can-eat” special and still attract customers?——————————————–References:Unit 6 Assignment Template:Name: -Course Number: -Section Number: -Unit Number: – 6Date: ———————————– General Instructions for all Assignments———————————–1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:Course number_section number_LAST_FIRST_ unit number2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.4. Provide a list of references at the end of the last page of your assignment.5. Upload the completed assignment to the appropriate dropbox.6. Any questions about the assignment, or format questions, should be directed to your course instructor.——————————————- Career Competencies —————————————–In this assignment, you will engage in developing the following career competencies:Analyzing Quantitative DataAnalyzing Qualitative Data——————————————- Assignment ——————————————-Suppose that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese. (In real life the actual price floor was officially set at $16.10 per hundredweight of cheese. One hundredweight is 100 pounds.) At that price, according to data from the USDA, the quantity of cheese produced in 2009 by U.S. producers was 212.5 billion pounds, and the quantity demanded was 211 billion pounds. To support the price of cheese at the price floor, the USDA had to buy up 1.5 billion pounds of cheese. The accompanying diagram shows supply and demand curves illustrating the market for cheese..jpg”>In the absence of a price floor, the maximum price that a few of the consumers are willing to pay is $0.20 for a pound of cheese whereas the market equilibrium price is $0.13 per pound. The graph also shows that the minimum price at which a few of the producers are willing to sell is $0.06 per pound. In the absence of a price floor, how much consumer surplus is created?b. How much producer surplus?c. What is the total surplus?The maximum price that a few of the consumers are willing to pay is $0.20 per pound of cheese, and the price floor is set at $0.17 per pound. With the price floor at $0.17 per pound of cheese, consumers buy 211 billion pounds of cheese. How much consumer surplus is created now?The minimum price at which a few of the producers are willing to sell a pound of cheese is $0.06, and the price floor is set at $0.17 per pound. With the price floor at $0.17 per pound of cheese, producers sell 212.5 billion pounds of cheese (some to consumers and some to the USDA). How much producer surplus is created now?The surplus cheese USDA buys is the difference between the quantity of cheese producers sell (212.5 billions of pounds of cheese) and the quantity of cheese consumers are willing to buy at the price floor (211 billions of pounds of cheese). How much money does the USDA spend on buying up surplus cheese?.png”>Taxes must be collected to pay for the purchases of surplus cheese by the USDA. As a result, total surplus (producer plus consumer) is reduced by the amount the USDA spent on buying surplus cheese. Using your answers for parts d, e, and f, what is the total surplus when there is a price floor?h. How does this