Principles of Microeconomics
8th Edition
ISBN: 9781337470384
Author: N. Gregory Mankiw
Publisher: Cengage Learning US
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Chapter 9, Problem 8PA
(a):
To determine
The impact of avoiding tariff and taxing the consumption instead.
(b):
To determine
The impact of avoiding tariff and taxing the consumption instead.
(c):
To determine
The impact of avoiding tariff and taxing the consumption instead.
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1b. (5 pts) Under the 1990 Farm Bill and given the initial situation of a target price and
marketing loan, indicate where the market price (MP), quantity supplied (QS) and demanded
(QD), government stocks (GS), and Deficiency Payments (DP) and Marketing Loan Gains
(MLG), if any, would be on the graph below. If applicable, indicate the price floor (PF) on the
graph.
TP
$
NLR
So
Do
Q/yr
Now, let us assume that Brie has altruistic preferences. Her utility function is now given by:
1
UB (xA, YA, TB,YB) = (1/2) (2x+2y) + (2x+2y)
What would her utility be at the endowment now? (Round off your answer to the nearest
whole number.)
110
Chapter 9 Solutions
Principles of Microeconomics
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