1.The government considers taxing the market for pink lady apples. Assume that this market has a downward sloping demand curve and an upward sloping supply curve. The tax division prepared the following statements for the PM to consider, which of them are true? a) If the tax is a unit tax on consumers, they will pay the full burden of the tax. b) If the tax is a unit tax on producers, they will pay the full burden of the tax. c) No matter if the tax is on consumers or on producers, the distribution of the burden of the tax is going to be the same. d) If the tax you choose is a 1 pound per unit consumed, paid by the consumer, the price in the market will surely go down by more than one pound. e) If the tax you choose is a 1 pound per unit produced, paid by the producer, the price in the market will surely go down by less than one pound.

2.Consider the market for EC102 beer. The demand in the LSE campus is given by Q=50-2p and the supply is given by Q=3p. Which of the following statements are true for this market? a) The perfect competition equilibrium price is 10. b) The perfect competition equilibrium price is 30. c) The perfect competition equilibrium quantity is 30. d) The total surplus is 1200. e) The consumer surplus is 300. f) The producer surplus is 300.

3.Suppose we are in a market with fixed marginal costs and a downward sloping demand curve. Suppose we break a monopoly up into 10 identical firms with the same technology as the monopolist. After we break the monopoly into the 10 firms, there is perfect competition between them. Which of the following statements are true? a) The profits made by the monopolist are larger than the combined profits of the 10 identical firms when there is perfect competition between them. b) The monopolist will always produce less than the combined production of the 10 firms and sell at a lower price. c) The monopolist will always produce more than the combined production of the 10 firms and sell at a lower price. d) While the monopolist will have strictly positive profits, each of the 10 firms will have zero profits. e) A tax of t on each unit consumed, imposed on consumers, will lower the price the monopolist charges but not the price the 10 firms charge.