ps4f06 - Economics 101, Problem Set 4 Due 11/20/2006 Alan...

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Economics 101, Problem Set 4 Due 11/20/2006 Alan C. Marco November 14, 2006 Instructions. Due at the beginning of lecture (or beforehand in my box in the economics department). I encourage you to work in groups of 2 or 3. Please turn in only one problem set for each group, with the full names of all the students on the front page. Problem sets must be neat, readable, and concise. I prefer typed. They must be stapled if they are more than one page. 1. Suppose the (perfectly competitive) market for wheat is initially at a short-run and long-run equilibrium. Show (using a two-panel graph of the Frm and the market) the short-run and long-run impact on p, Q (market quantity), and q (Frm quantity) of the following events: (a) A tax increases per-unit costs by $1 per unit. (b) A technology change reduces Fxed costs. (c) The demand for wheat increases. (d) The demand for wheat decreases. (e) A large fraction of wheat farms get destroyed by a hurricane. 2. Suppose that marginal costs for a perfectly competitive Frm are given by
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This note was uploaded on 04/26/2010 for the course ECON 101 taught by Professor Staff during the Spring '08 term at Vassar.

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ps4f06 - Economics 101, Problem Set 4 Due 11/20/2006 Alan...

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