ct1.pdf - EECM3714: INTRODUCTORY MATHEMATICAL ECONOMICS...

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