quiz4

quiz4 - Econ 1 M10 Quiz 4 Name Perm In the market for green...

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Unformatted text preview: Econ 1 M10 Quiz 4 Name_________________________ Perm____________________ In the market for green fuzz, quantity supplied and quantity demanded are given by: Qs = 5P – 50 and Qd= 400 – 10P. 1. Suppose the government imposes a price ceiling at P=\$20. In the graph below, draw the supply and demand curves, and the price ceiling. Label the resulting consumer surplus, producer surplus, and deadweight loss from the price ceiling. Supply and Demand of Green Fuzz 80 70 60 price of green fuzz 50 40 30 20 10 0 0 50 100 150 200 250 300 350 400 quantity of green fuzz 2. What is the amount of the deadweight loss caused by this price ceiling? \$___________ In the market for pinot grigio, the inverse demand curve is P=100 – 2Q, and the inverse supply curve is P=25+Q, where Q is measured in gallons of pinot grigio. 3. If the government imposes a \$15 per gallon tax on pinot grigio, the price buyers will have to pay for a gallon of pinot grigio is \$_______, and the price sellers receive is \$___________. 4. The deadweight loss from the tax on pinot grigio is \$____________ A perfectly competitive firm producing widget polish has the following cost structure: • !" = 200 • !" = 20! + !! • !" = 200 + 20! + !! • !" = 20 + 2! 5. If the market price for widget polish is \$80, this firm should produce _______ units of widget polish. 6. If the market price for widget polish is \$80, this firm will make a profit of \$________. Suppose the demand schedule for paintings of dogs playing poker is given below: Quantity MB (or max price) 1 \$70 2 \$65 3 \$60 4 \$55 5 \$50 6 \$45 7 \$40 The marginal cost of producing a painting of dogs playing poker is \$42, and there are no fixed costs. 7. A perfectly competitive firm (in long run equilibrium) would produce _______ paintings and sell them for \$_______ each. 8. A monopolist would produce _______ paintings and sell them for \$_______ each. 9. The deadweight loss from monopoly in the paintings of dogs playing poker market is \$_____________. 10. Suppose a monopolist has a constant marginal cost of \$6. It faces an inverse demand curve of P=30-Q, and therefore a marginal revenue curve of MR=30-2Q. This monopolist would supply ______ units for a price of \$______ each. ...
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