EECM3714: INTRODUCTORY MATHEMATICAL ECONOMICS
CLASS TEST 1; MARKS = 25; TIME = 50 MINUTES
STUDENT NUMBER
: …………
..
…………
INITIALS AND SURNAME:
………………………………
This is a closed book class test. This paper consists of 6 questions on 2 pages
INSTRUCTIONS
•
Answer all of the questions. Write legibly and use ONLY black or blue ink and ONLY write your
FINAL answers in the spaces provided.
•
Remember to fill in your name and student number at the top of this question paper!
•
Round all answers to the nearest FOUR decimals.
•
ONLY hand in this question paper after completing the class test!
1
) The inverse demand and inverse supply of rivets are
? = ? − ?
𝒅
?
and
? = −? + ??
?
1a
) Find the equilibrium price and quantity of rivets. [
2
]
.
1b
) Suppose that the government imposes an ad valorem tax of
?%
on the producers of rivets. Now find the after-tax
equilibrium price and quantity. [
2
]
1
1c
) Analyse the incidence (burden) of this ad valorem tax on rivets. [
2
]
Consumers’ burden = ………………………………………………………………………………………….….
;
