Hey can you please help me with this problem?! thanks! Suppose that there are fi
ID: 1208507 • Letter: H
Question
Hey can you please help me with this problem?! thanks!
Suppose that there are fifteen students 1, 3, 5, 7,..., 29 each holding a single gold bar and fifteen students 2, 4, 6, ..., 30 just have money, and no gold. A student only needs one gold bar, and twice her student number is what that one bar is worth to her as a buyer, while three times her student number is the cost as a seller. Additional bars are useless. So odd students are the potential sellers, and even students are potential buyers. Into this mix walks Professor Q with a box full of 10 gold bars that she has no use for at all (i.e., are worthless).
a) [6 points] Find the market-clearing price range and quantity without Professor Q,
b) [4points] Find the new market clearing price and quantity with Professor Q
c) [3 points] How much did Professor Q depress the price of the bars of gold?
d) [3 points] How much did Professor Q increase the quantity of bars of go
Explanation / Answer
So for Equilibrium ,
Willingness to sell >= Willingness to buy
So , Equlibrium Quantity = 10 , Price = 57
b.
Since professor provided 10 bars for free , So, students will have it plus 5 students will buy it
So, Q = 15 ,P = 27
c How much did Professor Q depress the price of the bars of gold?
= 57 - 27 = 30
d) [3 points] How much did Professor Q increase the quantity of bars of go
= 15 - 10 = 5
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Seller Willingness to sell Buyer Willingness to buy 1 3 2 4 3 9 4 8 5 15 6 12 7 21 8 16 9 27 10 20 11 33 12 24 13 39 14 28 15 45 16 32 17 51 18 36 19 57 20 40 21 63 22 44 23 69 24 48 25 75 26 52 27 81 28 56 29 87 30 60