ct1.pdf - EECM3714 INTRODUCTORY MATHEMATICAL ECONOMICS...

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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 = ………………………………………………………………………………………….…. ;

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