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HW3 - Econ 1 Tang Fall Quarter 2007 Homework 3 Chapters 5 6...

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Econ 1: Tang Fall Quarter 2007 Homework 3: Chapters 5 & 6 Due Wednesday November 7, at the beginning of class. Please write your name, PID, and section number/TA name on your homework. 1. The table gives the demand and supply schedules for spring water. Price (dollars per bottle) Quantity demanded (bottles per day) Quantity supplied (bottles per day) 0 80 0 0.50 70 10 1.00 60 20 1.50 50 30 2.00 40 40 2.50 30 50 3.00 20 60 3.50 10 70 4.00 0 80 a. What is the maximum price that consumers are willing to pay for the 30th bottle? b. What is the minimum price that producers are willing to accept for the 30th bottle? c. Are 30 bottles a day less than or greater than the efficient quantity? d. What is the consumer surplus if the efficient quantity of spring water is produced? e. What is the producer surplus if the efficient quantity is of spring water is produced? f. What is the deadweight loss if 30 bottles are produced? 2. Suppose that the supply curve for wheat is given by Q S =10P-10 and suppose that the demand curve for wheat is given by Q D =200-20P . a. Find the equilibrium price and quantity of wheat. b. Sketch a picture of the supply curve and the demand curve. Be sure to label i) both axes, ii) the y-intercept both curves, iii) the slope of both curves, and iv) the equilibrium price and quantity.
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