432HW03[1]

# 432HW03[1] - Westerhold Name Econ432 HW#3:,June21st . 1...

This preview shows pages 1–5. Sign up to view the full content.

Westerhold Name:_____________________________ Econ 432 HW #3: Efficient Provision of Private and Public  Goods due Monday, June 21 st Undergraduates should answer questions 1- 3 only. Graduate students should   complete the entire assignment. 1. Assume we have the following information for two consumers, Bill and Jessica, for office  supplies. Show the private market results in an efficient allocation of resources for private  goods. Bill:  P=100-5Qd Jessica:   P=75-2.5Qd A. Determine each person’s demand equation (Qd=) and graph each person’s demand  curve separately showing the values for the x and y intercepts for Bill and Jessica.  Also create the market demand equation and graph the market demand curve showing  the x and y intercept values.

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

View Full Document
B. Assume the market supply curve is given as Qs= -20 + 2P.  Show this on your market  graph above and indicate the value of the minimum selling price. C. Determine the equilibrium price (Pe) and quantity (Qe) and show this on your graph in  part A. D. At the market price, determine the amount of office supplies that Bill will purchase  (show on graph) and Jessica will purchase (show on graph). Does this match your  equilibrium quantity?

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

View Full Document
2.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern