Homework 5 - ECON 1100: Intermediate Microeconomics...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 1100: Intermediate Microeconomics Instructor: Sandra Orozco Homework 5 Due date: November 3, 2010 1. (10 points) In this market the demand and supply curves are given by Qd = 10 - 0.5Pd Qs = - 2 + Ps when Ps = 2, and 0, when Ps < 2 where Qd is the quantity demanded when the price consumers pay is Pd, and Qs is the quantity supplied when the price producers receive is Ps. (a) With no tax, what are the equilibrium price and quantity? (b) Suppose the government imposes an excise tax of $ 3 per unit. What will the new equilibrium quantity be? What price will buyers pay? What price will sellers receive? 2. (10 points) In a competitive market, there is currently no tax, and the equilibrium price is $ 60. The market has a down-ward- sloping demand curve. The government is about to impose an excise tax of $ 4 per unit. In the new equilibrium with the tax, what price will producers receive and consumers pay if the supply curve is a) Perfectly elastic b) Perfectly inelastic Illustrate your answers graphically. 3. (20 points) Suppose the market for corn in Pulmonia is competitive. No imports and exports
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/10/2012 for the course ECON 1100 taught by Professor Unver during the Fall '06 term at Pittsburgh.

Page1 / 2

Homework 5 - ECON 1100: Intermediate Microeconomics...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online