Lab1 - Statistics 103: Lab 1 LAB PROBLEMS 1. Suppose that...

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Unformatted text preview: Statistics 103: Lab 1 LAB PROBLEMS 1. Suppose that the tax t i paid by individual i is the following function of his or her income x i : t i = 0 . 1( x i- 2000) (i.e., there is a flat tax of 10% on all income over $2000). You know that total income in a geograph- ical area containing 500 individuals is $5 , 000 , 000. What will the total tax revenue be? answer: 400,000 2. In a particular geographical area, the demand func- tion for each person i for a particular good is q d i = 100 + . 2 x i- 9 p where q d i is quantity demanded for person i , x i is person i s income and p is the commoditys price. For firms in this area the supply function for this good is q s j =- 50 + 20 p where q s j is the quantity supplied of the good by firm j . There are 5 firms and 100 consumers. Total income of the consumers is $100 , 000. Equilibrium occurs where 100 X i =1 q d i = 5 X i =1 q s j (i.e., market demand equals market supply). Find the equilibrium price....
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This note was uploaded on 09/13/2011 for the course STA 103 taught by Professor Drake during the Spring '09 term at UC Davis.

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Lab1 - Statistics 103: Lab 1 LAB PROBLEMS 1. Suppose that...

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