View the step-by-step solution to:

# University of California, Irvine Department of Economics Economics 100 B: Intermediate Economics II Winter 2009 Prof. Safarzadeh Assignment #1...

i need help with questions 6 and 7
University of California, Irvine Department of Economics Economics 100 B: Intermediate Economics II Winter 2009 Prof. Safarzadeh Assignment #1 Student Name :_________________ I - In each problem below, you are to illustrate the market for gasoline with the appropriately shaped standard demand and supply curves. In each case, draw the shift in the demand and supply which result from the actions taken in the market or changes in related variables. Indicate in the space provided whether each variable and demand and supply will increase (+), decrease (-), remain unchanged (0), or have ambiguous sign (?). Please, number the curves so that the direction of each shift will be clear. Mark the original equilibrium by E 1 and the final equilibrium by E 2. Also, assume that none of the curves are perfectly inelastic or perfectly elastic i.e., the standard demand-supply model. Gasoline is assumed to be a normal good. 1. The economy is expanding and GDP is growing. P | Demand :. ..... | Supply : . ..... | Equilibrium Quantity :...... | Equilibrium Price : . ..... | | |____________________________ Q 2. Government levies sales taxes on gasoline and collects it from the producers. P | Demand :. ..... | Supply : . ..... | Equilibrium Quantity :...... | Equilibrium Price : . ..... | | |____________________________ Q
3. GDP is rising and price of crude oil (input in production of gasoline) is declining. P | Demand :. ..... | Supply : . ..... | Equilibrium Quantity :...... | Equilibrium Price : . ..... | | |____________________________ Q 4. A new, easily accessible public transportation starts operating. P | Demand :. ..... | Supply : . ..... | Equilibrium Quantity :...... | Equilibrium Price : . ..... | | |____________________________ Q 5. There is expectations of higher oil and gasoline prices in the future. P | Demand :. ..... | Supply : . ..... | Equilibrium Quantity :...... | Equilibrium Price : . ..... | | |____________________________ Q 6. Demand for a product of a monopoly is given as Q = 100 - 2P. a. Graph demand and marginal revenue of the firm. b. Find the revenue maximizing price and quantity of the monopoly. c. Prove that at the revenue-maximizing quantity price elasticity of demand equals one. d. Find price elasticity when price of the product is \$30. 7- Prove that for a good sold in monopoly market MR = P(1 + 1/e), where e is the price elasticity
Show entire document

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents