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Problem_Set_7 - revenue welfare and deadweight loss Give...

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ECON W3211.002 Intermediate Microeconomics Problem Set 7 Due Monday, November 15, 2010 1. If the inverse demand function for radios is p = a - bQ , what is the consumer surplus if price is a/ 2 ? 2. If the supply function is Q = Ap η , what is the producer surplus if price is p * ? 3. Suppose that the demand curve for wheat is Q = 100 - 10 p and the supply curve is Q = 10 p . The government imposes a specific tax of τ = 1 per unit. (a) How do the equilibrium price and quantity change? (b) What effect does this tax have on consumer surplus, producer surplus, government
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Unformatted text preview: revenue, welfare, and deadweight loss? Give the exact quantities. 4. Suppose that the demand curve for wheat is Q = 100-10 p and the supply curve is Q = 10 p . The government imposes a price ceiling of p = 3 . (a) Describe how the equilibrium changes. (b) What effect does this ceiling have on consumer surplus, producer surplus, and dead-weight loss? Give the exact quantities. 1...
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