311_assignment_'l.docx 4. (2 points) Write out the formulae for the own price elasticity, that is, a formula that calculates the percentage change in 611 for a 1% rise in I" , all else held equal. 5. (2 points) Questions 5-6 concern the market for grass seed which can be expressed as: Q1D =1002p , and supply curve: Q5 = 3p . What is the price and quantity at equilibrium? demand curve: 6. (3 points) Suppose that the government now imposes a specic tax of 5 to be paid by consumers. This means that consumers now pay p + 5 while producers receive p. Calculate these new prices. What fraction of the tax is paid by consumer versus producers? That is, nd the tax incidence in which consumers pay X/Z of the tax while sellers pay Y/Z of the tax. (Hint: compare the new prices to the original price that was common to both parties; your job is to find X, Y, and Z.) Multiple choice: In the remaining questions, indicate which letter has the best answer. (3 points each) 4o 50 70 140 Q _ -5 ('5') Dashboard Calendar E To Do 0 Notifications glnbox 311_assignment_'l.docx Multiple choice: In the remaining questions, indicate which letter has the best answer. (3 points each) 40 50 70 140 Q 7. The above gure shows a graph of the market for pizzas in a large town. No pizzas will be demanded unless price is less than: A) $0. B) $5. C) $12. D) 514. 8. In the above gure, no pizzas will be supplied unless the price is above: A) $0. B) $5. C) $12. D) $14. 9. Suppose there are 100 identical rms in the rag industry, and each rm is willing to supply 10 rags at any price. The market supply curve will be a(n) A) vertical line where Q = 10. B) vertical line where Q = 100. C) vertical line where Q = 1000. D) horizontal line where Q = 1000. 10. The market supply of Oregon hazelnuts is given by: Q = 20 + LSP - 0.5COST where Q is hazelnut quantity supplied, P is hazelnut price, and COST is an index variable representing the costs of production. The coefcient -0.5 represents: A) how much costs change when quantity supplied decreases by one unit. B) how much costs change when quantity supplied rises by one unit. C) the partial derivative of cost with respect to quantity supplied. D) the partial derivative of quantity supplied with respect to cost. _ -5 ('5') Dashboard Calendar E To Do 0 Notifications glnbox 311_assignment_'l.docx 10. The market supply of Oregon hazelnuts is given by: Q = 20 + LSP - 0.5COST where Q is hazelnut quantity supplied, P is hazelnut price, and COST is an index variable representing the costs of production. The coefcient -0.5 represents: A) how much costs change when quantity supplied decreases by one unit. B) how much costs change when quantity supplied rises by one unit. C) the partial derivative of cost with respect to quantity supplied. D) the partial derivative of quantity supplied with respect to cost. 11. An increase in the price of pork will lead to A) a movement up along the demand curve of pork. B) a movement down along the demand curve of pork. C) a rightward shift of the demand curve of pork. D) a leftward shift of the demand curve of pork. 12. An increase in consumer incomes will lead to A) a rightward shift of the demand curve for new TVs. B) a movement upward along the demand curve for new TVs. C) a rightward shift of the supply curve for new TVs. D) no change of the demand curve for new TVs. 13. Consider the demand function Qd = 150 - 2P. The effects of other determinants of Qd is reected in A) the intercept of the function. B) the slope of the mction. C) neither the slope nor the intercept of the function. D) in both the slope and the intercept of the function. 14. The term "inverse demand curve" refers to A) a demand curve that slopes upward. B) expressing the demand curve in terms of price as a function of quantity. C) the demand for "inverses." D) the difference between quantity demanded and supplied at each price. _ -5 ('5') Dashboard Calendar E To Do 0 Notifications glnbox 311_assignment_'l.docx Questions 1-5 concern the following demand function of an individual for good 1: '11 = Bo + 61191 + szz + 63173 + [341' P2, where 611 is the amount of good 1 consumed, 17,, p 3 are the prices of goods 1, 2, and 3, respectively, and Yrepresents the income of a person. Note that the amount consumed ('1') depends not only on its own price, but also on how much money a person has (Y) and also how much it would cost to buy goods other than good 1. The betas ('3' ' [32' [33' I34 ) are parameters that stand in for real numbers that could be a negative number, positive number, or zero. 1. (3 points) 3'11 Take the partial derivative of q' with respect to p, , that is, calculate: 6p] Explain in words What this tells us (hint: make a sentence that starts out: When the price of good 1 rises by one unit, ....) What sign (+, I], or 0) do you expect the partial derivative to have? 2. (3 points) acII Take the partial derivative of q' with respect to P2 , that is, calculate: 8p, Explain in words What this tells us. If good 1 consumption rises when the price of good 2 rises, what sign does the partial derivative to have? What does this imply about goods 1 and 2? 3. (3 points) 6"311 Take the partial derivative of q' with respect to Y, that is, calculate: BY Explain in words what this tells us. What sign do you expect the partial derivative to have? 4. (2 points) Write out the formulae for the own price elasticity, that is, a formula that calculates the percentage change in 11 for a 1% rise in 131 , all else held equal. _ - 5 ('5') Dashboard Calendar [To Do 0 Notifications glnbox