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Unformatted text preview: If so, what is the value of the surplus/shortage? (40 points, 10 points each) 2. True/False. If the equilibrium wage rate is $5 per hour, and the minimum wage is $7.25 per hour, a shortage of labor will exist. Graphically explain your answer. (10 points) 1 3. Using the graph shown, answer the following questions. a. What was the equilibrium price in this market before the tax? b. What is the amount of the tax? c. How much of the tax will the buyers pay? d. How much of the tax will the sellers pay? e. How much will the buyer pay for the product after the tax is imposed? f. How much will the seller receive after the tax is imposed? g. As a result of the tax, what has happened to the level of market activity? (35 points, 5 points each) 4. Using the graph shown, construct a demand curve for marshmallows given an income of $20. (15 points) Quantity of Chocolate Chips Quantity of Marshmallows 5 4 10 6 20 10 2...
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This note was uploaded on 04/08/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas.
 Spring '08
 Ledyard
 Supply And Demand

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