This preview shows page 1. Sign up to view the full content.
Unformatted text preview: f. With a $1 per unit tax, what is the long run price and quantity? How is the burden of the tax distributed between producers and consumers? g. Compare the dead weight loss in the short run and in the long run 2. Start with the same linear aggregate demand and short-run supply functions: Q D = 1000 ! 10 P Q S = 10 + 200 P Analyze the effect on CS, PS, and G (where G stands for government expenses) of a policy where the government sets the price of Q to be 40/7 and offers to buy any excess supply. (Note: This policy is a price floor of the type shown in Figure 9.7 of the text.) Suggested problems in the text: Chapter 9: 7, 29, and 37...
View Full Document
This note was uploaded on 08/09/2009 for the course ECON 100B taught by Professor Rauch during the Winter '07 term at UCSD.
- Winter '07
- Market Equilibrium