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practiceexam2B - Consider the market for desks where demand...

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Consider the market for desks, where demand and supply are estimated by the following equations: Demand: Q d = -2P +120 Supply: Q s = P – 30 1. At what level of desk production would allocative efficiency be satisfied? a. 20 b. 50 c. 120 d. 30 2. If the government sets a price ceiling of $55 in the market for desks, which of the following would occur? 3. If, instead of a price ceiling, the government sets a quota of 10 desks in the market for desks, which of the following will occur? 4. Tax incidence is 5. Consider the graph below. What is the tax that is imposed in this market?
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0 10 20 30 40 50 60 70 80 90 100 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 Quantity Price a. $2 b. $4 c. $10 d. $20
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