关键词 > ECONOMICS110A/111
ECONOMICS 110A/111 Assignment #1 2022/2023
发布时间：2022-10-06
Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit
ECONOMICS 110A/111
Assignment #1
2022/2023
True, False, or Uncertain [20 marks - 5 marks each]
Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the explanation that is important.
A1-1. Since demand curves are downward sloping, we would never see an increase in price accompanied by an increase in the equilibrium quantity traded in a market.
A1-2. An increase in consumer incomes will lead to an increase in the prices of all grocery store items.
A1-3. Theoretically, taxes on the sales of sugary soft drinks are perfect; they reduce consumption dramatically and raise a lot of revenue. [Hint: Assume a per-unit tax and a horizontal supply curve for soft drinks.]
A1-4. If the demand function for chicken is given by Qc = 100 – .25Pc + 10Pt + 100M, where Qc is the quantity of chicken demanded, Pc is the price of chicken, Pt is price of turkey, and M is the average income of consumers, then we can conclude that chicken has a downward sloping demand curve, is a substitute for turkey, and is a normal good.
Problems [20 marks - marks for each part as shown]
A1-5. Imagine that a market for a good is characterized by the following supply and demand equations:
QS = –35 + 35P QD =100 – 10P
where QS and QD are quantities in units and P is the price per unit.
(a) Graph the supply and demand curves with quantity on the horizontal and price on the vertical axis .
Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. [Hint: Show your work.] [5]
(b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use
either the point method or the average arc (midpoint) method.] [5]
(c) If a regulator imposes a quantity restriction by granting quotas for 60 units of output to existing producers, what is the new price and quantity traded? Does this policy create deadweight loss (DWL) in the market? Briefly explain and identify any DWL in your diagram. [5]
(d) What is the value of a unit of quota? Illustrate in your diagram. What is the total value of all units of the quota? [5]
The material in this assignment is copyrighted and is for the sole use of students registered in Economics 110, 111 and 112. The material in this assignment may be downloaded for a registered student's personal use, but shall not be distributed or disseminated to anyone other than students registered in Economics 110, 111 and 112. Failure to abide by these conditions is a breach of copyright, and may also constitute a breach of academic integrity under the University Senate'sAcademic Integrity Policy Statement.
