PS3_ProblemSet - AEM 4150 PRICE ANALYSIS Fall 2008 Problem...

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AEM 4150 PRICE ANALYSIS Fall 2008 Problem Set #3 This assignment is due at the beginning of class on Tuesday September 30, 2008. 1 Answer all of the following short questions. (a) Find one example of unit tax (also called excise tax) and identify whether they are imposed on sellers or buyers. E.g., gas tax, is on buyers. Please don’t used examples covered in class. Also find one example of subsidy and identify whether it is on sellers or buyers. Class example is ok. (b) Find one example (not covered in class) of price discrimination in real life. Identify which market is more price elastic. (c) Under what condition do producers pay more of the tax? (d) If both supply and demand curve shift to the right, and the supply increases relative to the demand, how does the equilibrium price change? How does the equilibrium quantity change? Show with a diagram. (e) How do monopoly equilibrium quantity and price (Qm and Pm) compare with those under perfect competition (Qc and Pc)? 2.
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PS3_ProblemSet - AEM 4150 PRICE ANALYSIS Fall 2008 Problem...

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