ECO100Assign9 - James E. Pesando Economics 100 Assignment...

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

View Full Document Right Arrow Icon
James E. Pesando Economics 100 Assignment #9 The Role of Government; The Measurement of National Income 1. The marginal and the average cost of producing a widget are $5. The widget industry is perfectly competitive. The demand curve for widgets is as follows: Price 3 4 5 6 7 8 Quantity Demanded 19 16 13 10 7 4 (A) What is the equilibrium price and quantity? (B) The government imposes a $1 excise tax on the suppliers of widgets. What is the new equilibrium price and quantity? Illustrate with a diagram. (C) After the government imposes the excise tax, does the new level of output imply allocative efficiency? What happens to consumer surplus/to producer surplus? Illustrate with a diagram. 2. The cost of a fireworks display is $500. There are 1,000 individuals in a town, who each would derive a benefit equal to $2 from watching the fireworks display. (A) Would a private entrepreneur be able to produce the fireworks display? Explain why or why not.
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.

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.

Page1 / 4

ECO100Assign9 - James E. Pesando Economics 100 Assignment...

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