Suppose demand is given by ??(?) = 1 – ? and supply ??(?) = ?, with prices in dollars. If buyers pay a 10 cent tax, what is the after tax demand? Do the same computations as the previous exercise and show that the outcomes are the same.
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Suppose
demand is given by ??(?) = 1 – ? and supply ??(?) = ?, with prices in dollars. If buyers pay a 10 cent tax, what is the after tax demand? Do the same computations as the previous exercise and show that the outcomes are the same. -
Suppose both demand and supply are linear, ??=?−? and ??=?+?p . A quantity tax is a tax that has a constant value for every unit bought or sold. Determine the new
equilibrium supply price ?? and demand price ?? when a quantity tax of amount t is applied. -
The Manning Company has two factories, one that makes roof trusses, and one that makes cabinets. With? workers, the roof factory produces trusses per day. With n workers, the cabinet plant produces 5. The Manning Company has 400 workers to use in the two factories. Graph the
production possibilities frontier . (Hint: Let ? be the number of trusses produced. How many workers are used making trusses?) -
Alarm & Tint, Inc., has 10 workers working a total of 400 hours per week. Tinting takes 2 hours per car. Alarm installation is complicated, however, and performing ? alarm installations requires ?2 hours of labor. Graph Alarm & Tint’s production possibilities frontier for a week.v
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