e360_apape_midterm1_review

E 5 points continuing to use your estimate in part c

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(e) (5 points) ** Continuing to use your estimate in part c, what is the deadweight loss of this tax?
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(f) (10 points) *** The mayor, in an effort to defend the tax, decides to put the whole amount raised towards a new public park. How valuable must this public park be to the people of Binghamton, for the tax to be justified, from an economic point of view? Make sure to explain your answer. For the best answer, give a dollar amount. For a good answer, describe how one would find this value. 4. (10 points) *** Who would vote for rent control? Suppose residents of New York City voted to pass rent control, which is a price ceiling on rents. Use a graph and welfare/surplus analysis to explain why the vote may have failed, if non-residents who wanted to move to NYC could have also voted on it. 5. Consider the following scenarios. In each case, draw a graph of the market(s) and label the original price and quantity and price and quantity in response to the event, and make sure you clearly indicate which curves are moving. Explain what assumptions you are making and why.
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