96%(142)137 out of 142 people found this document helpful
This preview shows page 3 - 5 out of 5 pages.
Consider the fictitious good Derp. The demand for Derp is Q = 1200 – 2P. Suppose the supply of Derp is given by Q = –600 +2P. What is the equilibrium price of Derp? 450 What is the equilibrium quantity of Derp? 300 What is the price elasticity of demand at the equilibrium price and quantity? -3 What is the price elasticity of supply at the equilibrium price and quantity? 3 For the next seven questions, suppose a per-unit excise tax of $50 per Derp is levied on the consumers. What price will sellers receive after the tax is levied? 425 What price will consumers pay after the tax is levied? 475 What percent of the tax will be paid by the consumers of Derp? 50 (give an answer between 0 and 100) What percent of the tax will be paid by the suppliers of Derp? 50 (give an answer between 0 and 100) How many Derps will be sold after the tax is imposed? 250
How much consumer surplus do consumers get after the tax? 15625 What is the deadweight loss created by this tax? 1250 Answer 1: 450 Correct! Answer 2: 300 Correct! Answer 3: -3 Correct! OR 3 Correct Answer Answer 4: 3 Correct! Answer 5: 425 Correct! Answer 6: 475 Correct! Answer 7: 50 Correct! Answer 8: 50 Correct! Answer 9: 250 Correct! Answer 10: 15625 Correct! Answer 11: 1250 Correct! Question 16: 24 / 33 pts. Complete the table below by filling in ALL missing numbers. If your answer is a decimal rather than a whole number, round your answer to the nearest 1 decimal place (the nearest tenth). Also, do not enter leading zeroes.For example, if the answer to a field is 1/8, enter .1 Do not enter .125 or 0.13 or 0.1 Consider the market for laptop computers. The demand for laptops is Q = 1800 – 3P. Suppose the supply of laptops is given by Q = –200 +2P. 1.What is the equilibrium price of laptops? 400