Problem_set_8

Problem_set_8 - Econ 1, Winter 2010, UCSD Problem Set 8...

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Econ 1, Winter 2010, UCSD Problem Set 8 From the textbook questions, at the bare minimum, do Problems 1 and 2 from Chapter 7 (on page 197) --------------------------------------------------------------------------------------------------------------------- Problem 1: Assume: a) Find equilibrium Q*, p*, PS, CS, and W b) Same question under a per-unit tax of $12. (Hint: it doesn’t matter on whom you choose to levy the tax, p B and p S should be the same either way). What is the Deadweight loss (DWL) of the tax? How are the DWL and the tax revenue spread among consumers and firms, why? (Hint: think elasticities!) c) Redo the first question under a price floor of $400, and then with a ceiling of $400 (no tax) d) Redo the question under a price floor of $600, and then then with a ceiling of $600 (no tax) ============================================ ============================================== Multiple-choice questions 2) In perfect competition, the product of a single firm A) has many perfect substitutes produced by other firms. B) has many perfect complements produced by other firms. C) is sold under many differing brand names. D) is sold to different customers at different prices. 3) In perfect competition, the elasticity of demand for the product of a single firm is A) 0. B) between 0 and 1. C) 1. D) infinite. 4) In the above figure, if the milk industry is perfectly competitive, then the firm's marginal revenue curve is represented by A) curve F. B) curve G. 000 , 1 4 ) ( 2 000 , 2 ) ( - = - = p p Q p p Q S D
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Econ 1, Winter 2010, UCSD Problem Set 8 C) curve H. D) curve I.
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This note was uploaded on 09/29/2010 for the course ECON 100A taught by Professor Smith during the Spring '08 term at Alabama.

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Problem_set_8 - Econ 1, Winter 2010, UCSD Problem Set 8...

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