Chapter 1: Economics
What is economics?
1. The study of how economic units make decisions under conditions of scarcity and the
objectives and incentives that influence these choices.
2. Microeconomics vs. macroeconomics:

Micro: individual scale

Macro:
Econ 344 Public Finance
Spring 2005
Midterm Exam 2
Name_
The duration of the exam is 1 hour 20 minutes.
The exam consists of 8 problems and it is worth 100 points. The extra credit
problem will only be counted if you lose points on other problems.
Please
Econ 344 Public Finance
Spring 2005
Midterm Exam 1
Name_
The duration of the exam is 1 hour 20 minutes.
The exam consists of 7 problems and it is worth 100 points. The extra credit
problem will only be counted if you lose points on other problems.
Please
Econ 344 Public Finance
Spring 2005
Midterm Exam 2
Name_
The duration of the exam is 1 hour 20 minutes.
The exam consists of 8 problems and it is worth 100 points. The extra credit
problem will only be counted if you lose points on other problems.
Please
Econ 344 Public Finance
Spring 2005
Midterm Exam 1
Name_
The duration of the exam is 1 hour 20 minutes.
The exam consists of 7 problems and it is worth 100 points. The extra credit
problem will only be counted if you lose points on other problems.
Please
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 10 solution.
1. (1 point) Assume that the demand equation is given by P= 99 3Q. If the
original price of the good was $9 and a $2 tax was imposed, how much marginal
excess burden will
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 9 solution.
1. (3 points) Ashley divides her working time between home production and market
production. The Value of marginal Product (=productivity in dollar terms) of
market produc
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 8 solution.
1. (5 points) Consider a monopolist who has a total cost curve of C=5Q+0.5Q2 (the
corresponding marginal cost function is given by MC=5+Q, and the average cost
function is
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 7 solution.
1. (1 point) (problem 3 on page 214) In 1990, the ratio of people age 65 or older to
people ages 20 to 64 in the United Kingdom was 26.7 percent. In the year 2050,
this ra
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 6 solution.
1. (2 points) In class we discussed two possible explanations of the fact that college
graduates make substantially more than people with just highschool education
human
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 5 solution.
1. (6 points) Wayne is maximizing his utility by choosing how many hours to work a
week. His preferences for leisure (L) and consumption of all other goods (C) are
given b
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 4 solution.
1. (2 points) Consider the following net benefits (measured in billions of dollars)
that will result from the passage of two legislative bills, X and Y:
Voter Issue X Issu
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 3 solution.
1. (4 points) Consider a group of college roommates considering throwing a party.
The marginal benefit to hosts and guests is given by MB=100 Q. (You can think
of Q as me
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 2 Solution.
1. (1 point) Name two properties that a good must satisfy to be classified as public
good. Also give at least two examples of public goods and a few examples of
goods that
Econ 344 Public Finance
Dzmitry Asinski
Spring 2005
Homework Assignment 1 Solution.
I generally write more than was expected of you to get a full credit.
1. Which tax is the largest source of the federal governments revenue? Which is the
second largest?
T