Economics 101 College student Name:
Answers to Second MidtermSection #:
June 13, 2011 KONSTRUERA Name:
WILL NOT BEGIN DOING WORK UNTIL THE INSTRUCTOR TELLS YOU TO DO THIS. READ THESE TYPES OF INSTRUCTIONS INITIALLY.
You have seventy five minutes to complete test. The exam involves 3 concerns worth 20 points each and twenty multiple choice questions really worth 2 points each for a total of 100 details.
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I, ______________________________, understand that offering answers to another student or taking answers from an additional student about this exam comprises academic misconduct and can result in my getting a zero within this exam. I also recognize that the use of a calculator on this test is restricted and that this kind of use can lead to my receiving a zero on this exam.
Complications (3 concerns each worth 20 points for a total of sixty points) 1 . You get the following information about the market pertaining to motorcycles. Marketplace Demand: G = four hundred вЂ“ 4Q
Market Source: P = 4Q
a. (2 points) Find the equilibrium price and volume in this marketplace. 400 вЂ“ 4Q sama dengan 4Q
8Q = 400
Q sama dengan 50 motorcycles
P = 4(50) sama dengan $200 every motorcycle
n. (2 points) What is the importance of consumer surplus in this marketplace? CS = (1/2)($400/motorcycle вЂ“ $200/motorcycle)(50 motorcycles) = $5000
c. (2 points) What is the value of maker surplus in this market? PS = (1/2)($200/motorcycle вЂ“ $0/motorcycle)(50 motorcycles) sama dengan $5000
g. (2 points) Suppose that the federal government decides to impose an excise tax of $80 per motorbike on suppliers in this industry. What will become the number of motor bikes sold in the forex market once this tax is definitely imposed? The modern supply curve with the bar tax will be P = 80 & 4Q. Using this equation as well as the demand formula we can solve for the modern quantity of motorbikes sold when the excise taxes is made. Thus, 80 + 4Q = 4 hundred вЂ“ 4Q or 8Q = 320 and Queen = 45 motorcycles. electronic. (3 points) Given the tax referred to in part (d), what will always be the duty incidence upon consumers? To obtain the tax incidence we must initially find the cost consumers spend once the bar tax can be imposed. When Q = 40 motorcycles, the price consumers pay is P sama dengan 400 вЂ“ 4Q or perhaps P = 400 вЂ“ 4(40) sama dengan $240/motorcycle. The excise duty raises the cost to customers from $200 to $240. Thus, the consumer tax chance can be worked out as the change in price times the quantity of motorcycles marketed once the taxes is imposed. Thus, CTI = ($240/motorcycle -$200/motorcycle)(40 motorcycles) = $1600.
f. (3 points) Given the taxes described partly (d), precisely what is the value of the deadweight reduction from the tax? DWL sama dengan (1/2)($240/motorcycles вЂ“ $160/motorcycles)(10 motorcycles) = $400 g. (3 points) What is the loss in producer excess from the imposition of the bar tax defined in part (d)? The loss is producer extra is equal to the area of your rectangle as well as the area of a triangle. The producer seems to lose some of their surplus when the govt captures it as duty revenue. The producer likewise loses a selection of their surplus due to the part of the deadweight loss through the tax that falls upon producers. Hence, the loss can be producer excess is corresponding to ($200/unit - $160/unit)(40 units) + (1/2)($200/unit - $160/unit)(50 units вЂ“ 40 units) = $1600 + one hundred dollar = $1800. h. (3 points) Suppose the government would really like motorcycle usage to fall to 20 devices. Relative...