mt1 - Boston University EC201 Intermediate Microeconomics...

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Boston University EC201 Intermediate Microeconomics Professor Todd Idson Midterm #1, 10/10 INSTRUCTIONS : Each question is worth 20 points. Be sure to show all of your work in the blue books (numerical answers without the associated calculations will not be given any credit). Also, when drawing graphs be sure to carefully label and define all points and lines (graphs without explanations will only be given partial credit). You have 80 minutes to complete the exam. 1) Suppose the market for grass seed can be expressed as Demand: Q D =95 - 6p Supply: Q S =-40 + 4p Say that the government imposes a $20 specific tax to be collected from sellers. Calculate and graph the pre-tax and post-tax equilibrium. What fraction of the tax is paid by sellers? What fraction is paid by buyers? How much tax revenue is collected? Be sure to show all calculations and relevant points on your graphs. 2) Suppose Lorraine's utility for California rolls (C) and sake (s) can be represented as U= 9C 0.5 S 0.5 . Lorraine walks into a restaurant with $200. California rolls cost $10 each
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This note was uploaded on 11/29/2010 for the course EC EC 201 taught by Professor Idson during the Fall '10 term at BU.

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