Microsoft PowerPoint - Review Exam 2

Microsoft PowerPoint - Review Exam 2 - 2.25 2.50 2.75 3.00...

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1 Practice Problems Elasticities • Calculate Elasticies: • Recognize Elastic vs. Inelastic • Elasticity and income/Taxation Elasticities • E D = -0.50 • E Y = 0.75 • E X,Y = -0.45 Questions: 1. Elastic? 2. Normal? 3. Substitutes or Complements? 4. If price/income/cross price goes up 10%, what happens to Q D ? Tax = $0.20 quantity $0.20 $0.80 $0.60 $0.40 20 40 60 80 100 price 120 140 1.00 Questions • What is the new price consumers pay? • What is the price suppliers receive? • What is the tax revenue? • What is the DWL? Subsidy = $30 quantity (thousands of tons) 20 80 60 40 20 40 60 80 100 Supply Dem and 100 price ($/ton) 120 140
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2 Questions • What is the new price consumers pay? • What is the price suppliers receive? • What is the subsidy cost? • What is the DWL? 38000 41000 45000 48000 50000 52000 55000 58000 1 1.25 1.50 1.75 2.00
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Unformatted text preview: 2.25 2.50 2.75 3.00 Demand Supply MSC Questions • What is the market Q? What is the efficient Q? • What is the DWL, CS, PS if unregulated? • What is the remedy • What is the tax revenue/subsidy cost • CS, PS, DWL with remedy 5 4 3 2 1 10 11 12 13 14 5 4 3 2 1 290 300 310 320 330 340 Supply Demand Questions • What is the short-run q per firm • What is the profit per firm in the short-run • If a loss, should the firm shut-down? • In the long-run what will happen • What is long-run price, q per firm, profits? Monopoly 5 4 3 2 1 10 15 20 25 30 35 Demand MR 3 Questions • What is the Monopoly price and quantity • What is the Monopoly profit and DWL? • What is the efficient regulatory price? • At that price what is profit and DWL?...
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This note was uploaded on 06/07/2011 for the course ECON 224 taught by Professor Ozturk during the Spring '09 term at South Carolina.

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Microsoft PowerPoint - Review Exam 2 - 2.25 2.50 2.75 3.00...

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