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Worksheet 3 Answers (09 22)

Worksheet 3 Answers (09 22) - a[10/15.04 or[10/15.32/8.16...

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Worksheet 1. New supply: P = Qs/2 + 12 a. Equilibrium quantity: 16 b. New price consumers will pay: 20; price suppliers receive 8 2. P = 20-Qd/2 P = Qs/8 a. Equilibrium price/Quantity: 4, 32 b. Consumers pay most of the tax (100%) c. $30 d. Graphically it doesn’t make sense, because of the simplifying assumption in B about the new price and quantity, but an answer can be gotten of 1 (but don’t worry about this problem 3. (question 4 from Tuesday) ; Correction: price goes from 20 to 10*
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Unformatted text preview: a. [10/15] / [.04] or [10/15] / [.32/8.16] both yield about 16.6666 4. (question 5 from Tuesday) Question is asking for Dead weight loss (DWL): (25-4) * (100-40) * ½ a. No effect (ceiling is above market price) b. No effect (ceiling is right at market price) 5. Question 6 from Tuesday; a. The demand curve would shift down (population increase) b. 0 (perfectly inelastic)...
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