ECON1110_HW5

ECON1110_HW5 - Introductory Microeconomics ECON 1110...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Introductory Microeconomics – ECON 1110 Homework Assignment #5 The homework assignment is due at the start of class on Tuesday, Nov 11. You are permitted to work in small groups, but you must submit your individual answers. Please be neat, or else you may not receive full credit. On any graphs you must correctly label all axes with the appropriate units of measure. Note that unless information is presented to the contrary, you can assume that the demand curve is downward sloping and the supply curve is upward sloping. 1. The following table lists the unit, marginal value in dollars (MV) and marginal cost in dollars (MC), for gasoline. Unit MV MC 1 10 4.00 2 9 4.50 3 8 5.00 4 7 5.50 5 6 6.00 6 5 6.50 7 4 7.00 8 3 7.50 9 2 8.00 10 1 8.50 a. What is the initial consumer and producer surplus? b. The government decides to subsidize production and pays a subsidy of $3 per unit of the good produced and sold. What is the resulting price demanders pay, consumer surplus, the price suppliers receive, producer surplus, consumer surplus, gains from trade, deadweight loss, and government expenditures? c. The government changes its mind and decides to pay the $3 subsidy to demanders. What is the resulting price equilibrium quantity and consumer surplus? 2.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

ECON1110_HW5 - Introductory Microeconomics ECON 1110...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online