a3odd_Fall2008

a3odd_Fall2008 - CARLETON UNIVERSITY Department of...

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 CARLETON UNIVERSITY Department of Economics ECON 1000A TUTORIAL ASSIGNMENT 3 GROUPS: 1, 3, 5, 7, 9, 11 Instructor: D. Smith Fall 2008 1. The diagram gives the supply and demand for movie tickets in Ottawa. The market is initially in equilibrium (point a) with price of $5 per tick and 5,000 tickets sold per week. Suppose that the town government establishes a new tax of $2 per movie ticket. a) Illustrate the effect of the new tax graphically. What will the new equilibrium price and quantity be? b) How much of the $2 tax is paid by consumers in the form of a higher price and how much is paid by movie ticket sellers in the form of reduced revenue per ticket? c) How much tax revenue will be collected each week? d) How much consumer surplus will be lost due to the tax? How much producer surplus will be lost? What is the deadweight loss of the tax?
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2. Answer the following questions relating to the numbers in the table below. Number of Workers (L) Output (Q) Average Product (AP) Marginal Product (MP)
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a3odd_Fall2008 - CARLETON UNIVERSITY Department of...

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