In Class practice 5(ANS)

In Class practice - XIaoyong Cao/Fall 2008 Principles of Microeconomics 202-100 In Class Practice 5-Chapter 8-10 Short Answer 1 Use the following

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XIaoyong Cao/ Fall 2008 Principles of Microeconomics 202-100 In Class Practice 5-Chapter 8-10 Short Answer 1. Use the following graph shown to fill in the table that follows. WITHOUT TAX WITH TAX CHANGE Consumer surplus Producer surplus Tax revenue Total surplus 2. Suppose that instead of a supply-demand diagram, you are given the following information: Q s = 100 + 3 P Q d = 400 - 2 P From this information compute equilibrium price and quantity. Now suppose that a tax is placed on buyers so that Q d = 400 - (2 P + T ). If T = 15, solve for the new equilibrium price and quantity. (Note: P is the price received by sellers and P + T is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you? 3. Use the graph to answer the following questions about CDs.
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a. What is the equilibrium price of CDs before trade? b. What is the equilibrium quantity of CDs before trade? c. What is the price of CDs after trade is allowed? d. What is the quantity of CDs exported after trade is allowed? e. What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j.
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This note was uploaded on 09/30/2009 for the course PSYCHOLOGY 264 taught by Professor C during the Fall '08 term at Rochester.

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In Class practice - XIaoyong Cao/Fall 2008 Principles of Microeconomics 202-100 In Class Practice 5-Chapter 8-10 Short Answer 1 Use the following

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