# Problem Set #3 Answers Economics 2106H, John L. Turner

Size: px
Start display at page:

Transcription

1 roblem et #3 Answers Economics 26H, John L. Turner 1. (a) upply (b) Equilibrium: *=5, *= emand 5 upply Curve given the tax (slope still Original upply Curve (d) New equilibrium: *=4, *= emand (e) No, because the tax is paid for by both consumers and producers not just consumers! (f) Tax Revenue= x 4 = 80 (g) roducers share = (-60)4=60 (i.e., %) Consumers share = (80-)4= (i.e., %) (h) & (i) Consumer urplus: Before the tax: 5(-)/2 = 125/2 = 62.5 After the tax: 4(-80)/2 = 40 roducer urplus: Before the tax: x 5 /2 = 3/2 = After the tax: 4(80-)/2 = 1 (j) The deadweight loss = (80-60)(5-4)/2 = : A upply curve after tax is imposed Original upply curve ead weight loss is area of triangle ABC = B C emand Curve 2. (a) upply Curve given the tax (slope still Original upply Curve emand Equilibrium (before the tax): *=6.25, *=93. Equilibrium (after the tax): *=5, *=95 (b) Consumer urplus: Before the tax: 6.25(-93.)/2= After the tax: 5(-95)/2 = 12.5 roducer urplus: Before the tax: 93. x 6.25/2 = After the tax: 5(95-)/2 = (c) The deadweight loss = (95-)(6.25-5)/2 =

2 3. (a ) 30 upply Curve given the tax (slope still Original upply Curve emand Equilibrium (before the tax): *=4/3, *= Equilibrium (after the tax): *=2, *= (b) Consumer urplus: Before the tax: 0 After the tax: 0 roducer urplus: Before the tax: (4/3)(1/2)= 83 1/3 After the tax: 2(-)/2 = 30 2 /3 (c) The deadweight loss = (-30)((/3)-2)/2 = 40/3 (d) In this instance, the tax burden is borne entirely by the producers (this is seen clearly in part b of this question, where the producer surplus declines after the tax, but the consumer surplus is unaffected by it). This extreme case is an artifact of the demand curve. The horizontal demand curve indicates that individuals are not willing to pay any greater price than p=, no matter what quantity is produced. Because this is the case, the producer cannot raise the price he charges consumers. If he did, no one would buy the product. This is in contrast to the situation, say, in problem #1, where there is a tradeoff as to who is burdened by the tax (both C and go down to some extent). When the demand curve is horizontal like this, the situation is what economists call one of perfect elasticity of demand. The opposite case would be that of vertical demand. Were this to be the case, the entire burden of the tax would be borne by the consumers. This case is known as perfect inelasticity of demand. 4. (a) 80 upply (b) Equilibrium: *=4, *=60 (note: total cost to consumer is 80 = 60 + tax of ) (c) - (f) ame answers as question (1) 60 Original emand Curve (g) The effect of a tax is independent of whether it is imposed on producers or consumers emand Curve after tax imposed 4 5 2

3 5. (a) upply Curve slope=1 (b) Equilibrium: *=, *= emand Curve 12.5 (c) rice Ceiling emand Curve upply Curve slope=1 (d) uantity demanded of 12 exceeds the quantity supplied of 2. Therefore, there is a shortage of pizzas. The market is not in equilibrium, but the price is \$2 and 2 pizzas are sold. (e) Consumer urplus = (-)/2 = 0 roducer urplus = x /2 = (f) Consumer urplus = 2(42-2) + 2(-42)/2 = 88 roducer urplus = 2 x 2 /2 = 2 (g) eadweight Loss = ((-2)(-2)/2)+(42-)(-2)/2= 160 h) 8 18 (Note figure not drawn to scale, should match above) 8 18 The quantity supplied is 18, and this exceeds the quantity demanded, which is 8. Therefore, there is a surplus of pizzas. Again, the market is not in equilibrium, but the price is \$18, and 8 pizzas are sold. i) =(18-8)8 + 8(8)/2=112 C=(-18)8/2=128 3

4 6. rice of Cars \$30,000 upply * = \$,000 \$15,000 emand 4 5 * 9 13 uantity of Cars (a) ee above. (b) The quantity demanded of any good is inversely related to the price of that good. Therefore, the demand curve for a good (which represents the quantity demanded for a given price of the good) is not upward sloping. (c) A change in demand is represented by a shift in the demand curve, while a change in quantity demanded is a movement along a demand curve. (d) The quantity supplied exceeds the quantity demanded by 9 cars. (e) The quantity supplied equals the quantity demanded and therefore, the market is in equilibrium. (f) The quantity demanded exceeds the quantity supplied by 4 cars. (g) The supply curve shows the quantity of goods that firms are willing to supply to the market at different prices (h) The market supply curve is the total (i.e., horizontal summation of) all firms supply curves in that market. The market demand curve is the total (i.e., horizontal summation of) all individuals demand curves for that good. (i) how graphically how each of the following affects the price and quantity of cars sold: (i) rice of steel increases: Therefore, supply of cars decreases, and thus the equilibrium price of cars increases and quantity decreases. ** * ** * (ii) Consumers income increases: Therefore, demand for cars increases, and thus the equilibrium price of cars increases and quantity increases. ** * * ** (iii) ame as (ii) 4

5 (iv) rice of gasoline increases: Therefore, demand for cars decreases, and thus the equilibrium price of cars decreases and quantity decreases. * ** ** * (v) ame as (i) (vi) If the ceiling is above the market price then nothing happens. If the ceiling is below the market price then the price (c) and quantity sold (s) decrease. * c s * 5

### Taxation by another name

Government Intervention as Implicit Taxation Taxation by another name 7-4 Control Government intervention in the form of price controls can be viewed as a combination tax and subsidy. A price ceiling is

### Midterm 2 Sample Questions. Use the demand curve diagram below to answer the following THREE questions.

! Midterm 2 Sample uestions Use the demand curve diagram below to answer the following THREE questions. 8 6 4 2 4 8 12 16 1. What is the own-price elasticity of demand as price decreases from 6 per unit

### Applications of supply and demand

Applications of supply and demand Comparative statics and government policy Comparative statics The simple supply and demand model we have developed can be used to analyze the effects of many events on

### Lesson 3-2 Profit Maximization

Lesson 3-2 rofit Maximization E: What is a Market Graph? 13-3 (4) Standard 3b: Students will explain the 5 dimensions of market structure and identify how perfect competition, monopoly, monopolistic competition,

### Micro Lecture 9: Consumer and Producer Surplus Applications

Micro Lecture 9: onsumer and roducer urplus Applications Review onsumer urplus: The net benefit buyers enjoy from purchasing and consuming the good. Height of Market emand urve: Reflects the benefit a

### Government Regulation

Government Regulation What do you think is the market price for renting an apartment in Plainfield? What happens to the quantity of demand and supply after the price change? List four outcomes that would

### Competitive Markets: Applications

ompetitive Markets: pplications 1. eadweight Loss: " erfectly ompetitive Market Without Intervention Maximizes otal urplus" 2. Government Intervention: Who wins and who loses? 3. Examples of Various Government

### Cosumnes River College Principles of Microeconomics Problem Set 4 Due March 3, 2015

pring 2015 Cosumnes River College rinciples of Microeconomics roblem et 4 ue March 3, 2015 Name: olutions rof. owell Instructions: Write the answers clearly and concisely on these sheets in the spaces

### Econ 98 (CHIU) Midterm 1 Review: Part A Fall 2004

Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.

### Test 2. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Name R# ECO 2301.007 - Roach Test 2 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Air pollution generated by a steel mill is an example of 1)

### Thursday, October 13: Short and Long Run Equilibria

Amherst College epartment of Economics Economics 54 Fall 2005 Thursday, October 13: Short and Long Run Equilibria Equilibrium in the Short Run The equilibrium price and quantity are determined by the market

### Government Policy, Efficiency, and Welfare

Government Policy, Efficiency, and Welfare Econ 102: Introduction to Microeconomics 1 1.1 Goals of today s class Goals of today s class Learn about consumer surplus and producer surplus, a convenient way

### Efficiency of Market Equilibrium 3.1 SAMPLE

Castle Got the answer? Be the first to stand with your group s flag. Market Equilibrium 3.1 Question 1: Define market equilibrium. Got it correct? MAKE or BREAK a castle, yours or any other group s. The

Econ 226 Principles of Microeconomics Fall, 24 Dr. Kathryn Wilson Due Date: Tuesday, September 28 th Homework 2 Answer Key 1. When the of movie admissions increases from \$7 to \$8, the demanded falls from

### Lecture # 4 More on Supply and Demand

Lecture # 4 More on Supply and emand I. Consumer Surplus Consumer surplus is the difference between what a consumer is willing to pay for a good and what the consumer actually pays when buying it. o Graphically,

### Econ 98 (CHIU) Midterm 1 Review: Part A Fall 2004

Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.

### 1. Welfare economics is the study of a. the well-being of less fortunate people. b. welfare programs in the United States.

1. Welfare economics is the study of a. the well-being of less fortunate people. b. welfare programs in the United States. c. the effect of income redistribution on work effort. d. how the allocation of

### Midterm 2 - Solutions

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis November 13, 2009 Instructor: John Parman Midterm 2 - Solutions You have until 11:50am to complete this exam. Be certain to

### Economics 411 Managerial Economics. Instructor: Ken Troske

Economics 411 Managerial Economics Instructor: Ken Troske 1 About the Course Business Economics applies basic economic principles to the types of problems faced by business decisionmakers. Particular attention

### 12-1 (4) EQ: What is Derived Demand? EQ: What is Marginal Physical Product? Factor Demand

E: What is a Factor Market? 12-1 (4) o far, when discussing markets, we have focused on the supply of and demand for products that consumers purchase and consume. However, there are also markets for the

### 1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price

1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. The two things needed for demand to exist are: willingness

### DEMAND. Economics Unit 2 Just the Facts Handout

DEMAND Economics Unit 2 Just the Facts Handout What is Demand? A market is a place where people buy and sell things. A market has two sides. There is a buying side and a selling side. The buying side of

### Supply, Demand, and Government Policies. Copyright 2004 South-Western

Supply, Demand, and Government Policies Copyright 2004 South-Western Supply, Demand, and Government Policies In a free, unregulated market system, market forces establish equilibrium prices and exchange

### SOLUTIONS TO TEXT PROBLEMS 6

SOLUTIONS TO TEXT PROBLEMS 6 Quick Quizzes 1. A price ceiling is a legal maximum on the price at which a good can be sold. Examples of price ceilings include rent control, price controls on gasoline in

### Microeconomics. More Tutorial at

Microeconomics Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. A legal maximum price at which a good can be sold is a price a. floor. b.

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester Duration: 110 minutes ECON101 - Introduction to Economics I Final Exam Type A 11 January

### ECON 101 MIDTERM 1 REVIEW SESSION SOLUTIONS (WINTER 2015) BY BENJI HUANG

ECON 101 MIDTERM 1 REVIEW SESSION SOLUTIONS (WINTER 2015) BY BENJI HUANG TABLE OF CONTENT I. CHAPTER 1: WHAT IS ECONOMICS II. CHAPTER 2: THE ECONOMIC PROBLEM III. CHAPTER 3: DEMAND AND SUPPLY IV. CHAPTER

### Supply and Demand. Chapter 3. Learning Objectives

upply and emand Chapter 3 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1. escribe how the demand and supply curves summarize the behavior

### Econ 2113 Test #2 Dr. Rupp Fall 2008

D Econ 2113 Test #2 Dr. Rupp Fall 2008 Name Pledge: I have neither given nor received aid on this exam Version A Signature: Directions: Bubble in name: Last, First Bubble in 00 in Special Codes Sign the

### Essential Graphs for Microeconomics

Essential Graphs for Microeconomics Basic Economic Concepts! roduction ossibilities Curve Good X A F B C W Concepts: oints on the curve-efficient oints inside the curve-inefficient oints outside the curve-unattainable

### PRICING IN COMPETITIVE MARKETS

PRICING IN COMPETITIVE MARKETS Some markets, such as those for agricultural commodities and gasoline, seem to have just one price at any given time. All producers in the market charge the same or very

### Ecn Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman. Final Exam

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman Final Exam You have until 8pm to complete the exam, be certain to use your time wisely.

### Instructions: DUE: day of your unit exam Block Period 1/31 st or 2/1 st

----------------- AP MICROECONOMICS-2018 MICRO Unit #1 Study Guide Name: Instructions: UE: day of your unit exam Block Period 1/31 st or 2/1 st Section 1: SUPPLY & EMAN (review Section from Semester 1)

### EXAM 2: Professor Walker - S201 - Fall 2008

EXAM 2: Professor Walker - S201 - Fall 2008 I. (3 Points Each) Multiple Choice 1. Leisure Hours Grades 10 80 15 40 20 20 The tradeoff shown in the PPF table above depicts A. decreasing per unit O.C. of

### In this chapter, look for the answers to these questions: The Market Forces of Supply and Demand Markets and Competition Demand market

C H A T E R The Market Forces of upply and emand E 4 RINCILE OF Economics I N. Gregory Mankiw remium oweroint lides by Ron Cronovich 2009 outh-western, a part of Cengage Learning, all rights reserved In

### Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 2

Economics 2 Spring 2018 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 2 1.a. In this problem we are dividing everything the household buys into two categories child care

### Macroeonomics. 4 this chapter, The Market Forces of Supply and Demand. look for the answers to these questions: Demand. Markets and Competition

C H A T E R In 4 this chapter, look for the answers to these questions: The Market Forces of upply and emand R I N C I L E O F Macroeonomics N. Gregory Mankiw remium oweroint lides by Ron Cronovich 2009

### Exam 01 - ECON Friday, October 1st

Name: Exam 01 - ECON 2301-05 - Friday, October 1st Figure 1 1. Refer to Figure 1. This economy has the ability to produce at which point(s)? a. A, B, D b. A, B c. C, F, G d. A, B, C, F, G 2. Any point

### MICROECONOMICS Midterm Test (sample)

Student Name:.. MICROECONOMICS Midterm Test (sample) Time: 60 minutes Student Number:. Total Mark:... /50 Class:. Converted Mark:../10 Section A: QUIZ 20 marks Show your answers on the ANSWER SHEET at

### ORGANIZING YOUR THOUGHTSII Use the diagram to help you take notes. Supply and prices are related. Indicate how they are related in the diagram.

Chapter 21, Section 1 For use with textbook pages 462 465 What Is Supply? KEY TERMS supply the various quantities of a good or service that producers are willing to sell at all possible market prices (page

### Exam 01 - ECON Friday, October 1st

Name: ID: A Exam 01 - ECON 2301-05 - Friday, October 1st 1. Demand is said to be inelastic if the a. quantity demanded changes proportionately the same as price. b. quantity demanded changes proportionately

### This is what we call a demand schedule. It is a table that shows how much consumers are willing and able to purchase at various prices.

Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. The remainder of this unit assumes a perfectly competitive

### Policy Evaluation Tools. Willingness to Pay and Demand. Consumer Surplus (CS) Evaluating Gov t Policy - Econ of NA - RIT - Dr.

Policy Evaluation Tools Evaluating Gov t Policy - Econ of NA - RIT - Dr. Jeffrey Burnette In economics we like to measure the impact government policies have on the economy and separate winners and losers.

### 1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price

1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. Quantity demanded vs demand: quantity demanded is

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2

Questions of this SAMPLE exam were randomly chosen and may NOT be representative of the difficulty or focus of the actual examination. The professor did NOT review these questions. MULTIPLE CHOICE. Choose

### Econ321 Chapter 2. Demand and Supply. Demand Supply Diagram. Review of Principles. The Demand-Supply Model

Econ321 Chapter 2 Review of rinciples Demand and Supply The Demand-Supply Model Is used for analyzing competitive markets What is a competitive market? Is an equilibrium model Can illustrate the use of

### Econ103_Midterm (Fall 2016)

Econ103_Midterm (Fall 2016) Total 50 Points. Multiple Choice Identify the choice that best completes the statement or answers the question. 1 point for each question. Total 15 pts. c 1. Which of the following

### Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 3

Economics 2 Spring 2018 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 3 1.a. A monopolist is the only seller of a good. As a result, it faces the downward-sloping market

### ECON 251 Exam 1 Pink Spring 2012

ECON 251 Exam 1 Pink Spring 2012 1. Which of the following is an example of the economic resource of capital? a. A \$20 bill b. A corporate bond c. a government savings bond d. none of the above 2. John

### Exam 1. ECON 101 Fall 2013 Vesselinov

Class: Date: Exam 1. ECON 101 Fall 2013 Vesselinov Multiple Choice Identify the choice that best completes the statement or answers the question. Figure 2-5 1. Refer to Figure 2-5. The opportunity cost

### Exam 1. ECON 101 Fall 2013 Vesselinov

Class: Date: Exam 1. ECON 101 Fall 2013 Vesselinov Multiple Choice Identify the choice that best completes the statement or answers the question. Figure 2-4 1. Refer to Figure 2-4. Efficient production

### Exam 1. ECON 101 Fall 2013 Vesselinov

Class: Date: Exam 1. ECON 101 Fall 2013 Vesselinov Multiple Choice Identify the choice that best completes the statement or answers the question. 1. When a tax is placed on the buyers of lemonade, the

### Econ Introduction to Microeconomics X3-B. Name:

Exam 3 Version B (White Version) Name: Each problem is worth 3 points unless otherwise indicated. This exam ends promptly at X:52. The late penalties for turning it in late are: 1 minute late: - 3 points

### LECTURE NOTES ON MICROECONOMICS

LECTURE NOTES ON MICROECONOMICS ANALYZING MARKETS WITH BASIC CALCULUS William M. Boal Part 3: Firms and competition Chapter 12: Welfare analysis Problems (12.1) [Pareto improvement, economic efficiency]

### NAME: ECNS 251 Homework 4 Elasticity, Supply and Demand III. 1. Consider the market for EpiPens.

ECNS 251 Homework 4 Elasticity, Supply and Demand III NAME: 1. Consider the market for EpiPens. a. If this market has very elastic supply and very inelastic demand, how would the burden of a tax on EpiPens

### I can explain the law of supply and analyze changes in supply in response to price and determinants.

I can explain the law of supply and analyze changes in supply in response to price and determinants. Success Criteria: Identify determinants of supply and accurately graph changes in supply. Basics of

### Department of Economics University of California, Davis ECONOMICS 1A. Second Midterm Exam Version B

Department of Economics University of California, Davis ECONOMICS 1A Spring 2010 L. Jay Helms Second Midterm Exam Version B Last Name: First Name: Your Student ID Number: Please check your registered section

### Supply and Demand. Chapter 3

upply and emand Chapter 3 1 emand A demand curve shows the amount of a good consumers wish to purchase at specified prices. emand curve is downward sloping emand refers to the whole schedule of prices

### Individual & Market Demand and Supply

Mr Sydney Armstrong ECN 1100 Introduction to Microeconomic Lecture Note (3) Individual & Market Demand and Supply The tools of demand and supply can take us a far way in understanding both specific economic

### ECO 162: MICROECONOMICS INTRODUCTION TO ECONOMICS Quiz 1. ECO 162: MICROECONOMICS DEMAND Quiz 2

INTRODUCTION TO ECONOMICS Quiz 1 Answer the entire question You are required to give brief explanation for each of the questions. 1. Explain the basic economic concepts with the help of Production Possibility

### This is the midterm 1 solution guide for Fall 2012 Form A. 1) The answer to this question is A, corresponding to Form A.

This is the midterm 1 solution guide for Fall 2012 Form A. 1) The answer to this question is A, corresponding to Form A. 2) Since widgets are an inferior good (like ramen noodles) and income increases,

### AP Microeconomics Chapter 4 Outline

I. Learning Objectives In this chapter students should learn: A. How to differentiate demand-side market failures and supply-side market failures. B. The origin of consumer surplus and producer surplus,

### !"#\$#%&"'()#*(+,'&\$-''(.#/-'((

Lecture 1 Basic Concerns of Economics What is Economics! Economics is the study of how society manages its scarce resources. o Economic Problem: How a society can satisfy unlimited wants with limited resources

### 1. Suppose that policymakers have been convinced that the market price of cheese is too low.

ECNS 251 Homework 3 Supply & Demand II ANSWERS 1. Suppose that policymakers have been convinced that the market price of cheese is too low. a. Suppose the government imposes a binding price floor in the

### Chapter 6 Elasticity: The Responsiveness of Demand and Supply

hapter 6 Elasticity: The Responsiveness of emand and Supply 1 Price elasticity of demand measures: how responsive to price changes suppliers are. how responsive sales are to changes in the price of a related

### PPA 723, Spring 2009 Professor John McPeak

Quiz One PPA 723, Spring 2009 Professor John McPeak Name: The total quiz is worth 20 points. Each question is worth 2 points, and each sub question is worth an equal share of the two points. 1) The demand

### The Financial Market

In this presentation, we take a closer look at how the interest rate is determined in the financial market. The financial market consists of a demand for money, which is a positive function of the level

### Queen s University Department of Economics ECON 111*S

Queen s University epartment of Economics ECON 111*S Suggested Solutions to Take-Home Midterm Examination February 7, 2007 Instructor: Sharif F. Khan Page 1 of 9 Pages PART A TRUE/FALSE/UNCERTAIN QUESTIONS

### MIDTERM I. GROUP A Instructions: November 20, 2013

EC101 Sections 03 Fall 2013 NAME: ID #: SECTION: MIDTERM I November 20, 2013 GROUP A Instructions: You have 60 minutes to complete the exam. There will be no extensions. The exam consists of 30 multiple

### Eco402 - Microeconomics Glossary By

Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no

### Bremen School District 228 Social Studies Common Assessment 2: Midterm

Bremen School District 228 Social Studies Common Assessment 2: Midterm AP Microeconomics 55 Minutes 60 Questions Directions: Each of the questions or incomplete statements in this exam is followed by five

### AP Econ Section 9 Micro

Name: Date: _ ID: A AP Econ Section 9 Micro Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Gas prices recently increased by 25%. In response, purchases

### Supply and Demand. Objective 8.04

Supply and Demand Objective 8.04 Supply and Demand Pages 258-259 259 copy bold terms and give a definition or description of each. Page 261 Copy the questions Worksheet A-2A 1. Surplus When the amount

### CHAPTER 3 ELASTICITY AND SURPLUS. Monday, September 19, 11

CHATER 3 ELASTICITY AND SURLUS YOU ARE HERE ELASTICITY One of the most important concepts in economics is elasticity The elasticity of demand and elasticity of supply are basically the slope of the supply

### Lesson 5. Adam Smith and the Free Market 1/27/2013. Markets and Competition. Unit 2. Krugman, Module 67 pp

Unit 2 Adam mith and the Free Market Lesson 5 Krugman, Module 67 pp. 71-76 0 Markets and Competition A market is a group of buyers and sellers of a particular product. A competitive market is one with

### AP/IB Economics Unit 2.1: Supply, Demand and Equilibrium. Welker's Wikinomics 1

Unit 2.1 Unit Overview Markets Definition of markets with relevant local, national and international examples Brief descriptions of perfect competition, monopoly and oligopoly as different types of market

### Homework 4 Economics

Homework 4 Economics 501.01 Manisha Goel Due: Tuesday, March 1, 011 (beginning of class). Draw and label all graphs clearly. Show all work. Explain. Question 1. Governments often regulate the price of

### Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 1

Economics 2 Spring 2019 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 1 1.a. Opportunity cost is defined as the value of what is forgone to undertake an activity. What you

### Lecture 3. The Market Mechanism. The Market Mechanism. The Market Mechanism. The Market Mechanism. The Market Mechanism. The Market Mechanism

Lecture 3 Readings: Chapters 3 Between 1900 and 2000, productivity grew faster in agriculture than in any other sector of the economy. Over the same period, productivity has only grown very slowly in the

### Amherst College Department of Economics Economics 111 Section 3 Fall 2012 Monday, September 17 Lecture: Elasticity

Amherst College epartment of Economics Economics 111 Section 3 Fall 2012 Monday, September 17 Lecture: Elasticity Market emand and Market Supply Curves Market demand curve: How many cans of beer would

### ECON 102 Micro Principles Exercise 2. Multiple Choice Questions. Choose the best answer July 24,2008

1 ECON 102 Micro Principles Exercise 2 Multiple Choice Questions. Choose the best answer July 24,2008 1. When marginal benefit (MB) is greater than marginal cost (MC) A) the economy produces too little

### Econ 101, section 3, F06 Schroeter Exam #2, Red. Choose the single best answer for each question.

Econ 101, section 3, F06 Schroeter Exam #2, Red Choose the single best answer for each question. 1. Which of the following is consistent with elastic demand? a. A 10% increase in price results in a 5%

### Chapter 2: Market Forces: Demand and Supply Answers to Questions and Problems

What are the effects of a high gas price on buying plans? You can see some of the biggest effects at car dealers lots, where SUVs remain unsold while sub-compacts sell in greater quantities. But how big

### Choose the single best answer for each question. Do all of your scratch-work in the side and bottom margins of pages.

Econ 101, Sections 3 and 4, S11, Schroeter Exam #2, Special code = 0002 Choose the single best answer for each question. Do all of your scratch-work in the side and bottom margins of pages. 1. The cross-price

### EC101 DD/EE Midterm 2 November 5, 2015 Version

EC101 DD/EE Midterm 2 November 5, 2015 Version Name (last, first): Student ID: U Discussion Section: Signature EC101 Midterm 2 F2015 INSTRUCTIONS (***Read Carefully***): ON YOUR QUESTION BOOKLET: Fill

### Econ Test 2B Dr. Rupp Tuesday, March 3, 2009 Pledge: I have neither given or received aid on this exam Signature

Econ 2113 - Test 2B Dr. Rupp Tuesday, March 3, 2009 Name Pledge: I have neither given or received aid on this exam Signature Multiple Choice Identify the letter of the choice that best completes the statement

### Chapter 4. Demand, Supply and Markets. These slides supplement the textbook, but should not replace reading the textbook

Chapter 4 Demand, Supply and Markets These slides supplement the textbook, but should not replace reading the textbook 1 What is a market? A group of buyers and sellers with the potential to trade 2 What

### ECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one

ECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one Question # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income:

### ECON 101 KONG Midterm 2 CMP Review Session. Presented by Benji Huang

ECON 101 KONG Midterm 2 CMP Review Session Presented by Benji Huang Chapter 5 Efficiency and Equity Benefit, Cost, Surplus Consumers (1) A consumer benefits from the consumption of a product this benefit

### Ecn Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman. Final Exam

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman Final Exam You have until 5:30pm to complete the exam, be certain to use your time wisely.

### One of the main drivers of market economies has been the concept of efficiency. Over the years economists have made the argument that markets allow

One of the main drivers of market economies has been the concept of efficiency. Over the years economists have made the argument that markets allow us to allocate resources efficiently. However, analysing

### Problem Set #2 - Answers. Due February 2, 2000

S/Econ 573 roblem Set # - Answers age 1 of 11 roblem Set # - Answers ue February, [Numbers in brackets are the points allocated in the grading. There are 13 points total] 1. [19]In the figure at the right

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Duration: 50 minutes Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester ECON101 - Introduction to Economics I Quiz 2 Answer Key 16 December

### ECON (ENT) COURSE LESSON THREE. Supply and Demand. CHAPTER 7 Supply and Demand. Lesson Three Supply and Demand 93

ECON (ENT) COURSE LESSON THREE Supply and Demand CHAPTER 7 Supply and Demand Lesson Three Supply and Demand 93 EXERCISES Matching (28 points) From the list below, select the term that matches each of the