Problem_set_8

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

This preview shows pages 1–3. Sign up to view the full content.

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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Econ 1, Winter 2010, UCSD Problem Set 8 C) curve H. D) curve I.
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 09/29/2010 for the course ECON 100A taught by Professor Smith during the Spring '08 term at Alabama.

### Page1 / 5

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

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online