ECO100Assign8 - James E. Pesando Economics 100 Assignment...

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James E. Pesando Economics 100 Assignment #8 Factors of Production, Market Failure, Externalities 1. Assume that the market for new homes is perfectly competitive. Illustrate, using diagrams, how a tax imposed on the buyers of new homes will affect (1) the demand for construction workers and (2) construction wages. 2. Explain whether the following statement is True or False. “The reason that the price of homes in downtown Toronto is so high is that the price of residential land is so high.” 3. The manufacture of trucks produces pollution of various kinds. Producing a truck creates one unit of pollution, and pollution has a cost to society of $3,000. The market for trucks is competitive, and market supply and demand are given by the following data: Price (thousand $) 19 20 21 22 23 24 25 Quantity supplied 480 540 600 660 720 780 840 Quantity demanded 660 630 600 570 540 510 480 (1) Graph the demand curve and the supply curve for the industry. What are equilibrium price and output? (2)
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This note was uploaded on 12/22/2009 for the course BIGBOOK_01 Bigbook_01 taught by Professor Bigbook_01 during the Spring '09 term at University of Toronto- Toronto.

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ECO100Assign8 - James E. Pesando Economics 100 Assignment...

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