Problem_Set_04 - Mon Wed

Problem_Set_04 - Mon Wed - Economics 1100: Intermediate...

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Economics 1100: Intermediate Microeconomics Spring 2011 Problem Set 4 This Homework is due Wednesday, March 2nd, at the beginning of class . 1. Suppose that the demand curve for wheat is q=100-10p and the supply curve is q=10p . a. Find the quantity and the price that clears the market and consumer and producer surplus. b. Assume the government imposes a price support at p=6 using a deficiency payment program; find the quantity supplied, the deficiency payment, and compute the effects this program has on consumer surplus, producer surplus, welfare, and dead-weight loss. c. Assume the government imposes a specific tax of τ =1 per unit. Compute the corresponding equilibrium price and quantity and the effect this tax has on consumer surplus, producer surplus, government revenue, welfare, and deadweight loss. d. Assume the government imposes a price ceiling of p=3. Compute the corresponding equilibrium and the effect this ceiling has on consumer surplus, producer surplus, and deadweight loss. 2.
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This note was uploaded on 03/10/2012 for the course ECON 1100 taught by Professor Unver during the Spring '06 term at Pittsburgh.

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Problem_Set_04 - Mon Wed - Economics 1100: Intermediate...

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