Q.2 Consider the following demand and supply model Q' =w. -v,(P+1)+v,m Q' --d, +8,(P+s) Where m is income/wealth, t is the tax rate and s is rate of subsidy which are exogenous. a. Find equilibrium price and quantity b. Find government total tax collection T c. Assuming o -0' -O write the above model in matrix form
Q.2 Consider the following demand and supply model Q' =w. -v,(P+1)+v,m Q' --d, +8,(P+s) Where m is income/wealth, t is the tax rate and s is rate of subsidy which are exogenous. a. Find equilibrium price and quantity b. Find government total tax collection T c. Assuming o -0' -O write the above model in matrix form
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
Problem 4TY
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part C D
![Q.2
Consider the following demand and supply model
Q' =w. -w,(P+1) +,m
Q' = -d, +8,(P+s)
%3D
Where m is income/wealth, t is the tax rate and s is rate of
subsidy which are exogenous.
a. Find equilibrium price and quantity
b. Find government total tax collection T
c. Assuming o =Q =0 write the above model in matrix form
d. Using part c., find dQ/dt, dp/ds while using Cramer's rule](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda4a8938-50aa-4ff6-8134-614dad65edf8%2Fb70c16ce-d407-41ff-9b83-c8beca002cc3%2Foija47a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q.2
Consider the following demand and supply model
Q' =w. -w,(P+1) +,m
Q' = -d, +8,(P+s)
%3D
Where m is income/wealth, t is the tax rate and s is rate of
subsidy which are exogenous.
a. Find equilibrium price and quantity
b. Find government total tax collection T
c. Assuming o =Q =0 write the above model in matrix form
d. Using part c., find dQ/dt, dp/ds while using Cramer's rule
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