a minimum price on output of 30. What are the effect of this on output? Suppose instead that the regulation raises the cost of product. Repeat the analysis. Go back to the first part of the analysis with the regulated price but not the additional cost. Suppose there is an innovation which can lower the cost of pro- viding the good to 5q. What is the value of this innovation under both an unregulated market and a regulated market to consumers, producers and society as a whole (total surplus)? Use profit-maximization and revealed choices by firms to show the law of supply. Be sure to define what is meant by the law of supply? Assume an isoquant for a fixed level of output equal to y = 1/2xx3 Fix w1 = 1. Show how the profit bundle changes as W2 moves from 1 to 2. Provide a historical situation in which periods of low inflation can be used to estimate the effect of usury laws (a price ceiling on interest rates) for similar values of real interest rates without low inflation. How do mortgage lenders typically ration credit when price ceilings bind? Lets suppose that a firm owns a proven oil reserve of k units which cannot be transferred and a technology for producing oil from reserves of y = ka. Suppose the price of oil is constant the interest rate (1+r)=1.03 and the oil expires after 2 periods. Solve for efficient use of oil over two periods. Suppose that an outside policy maker wants to reduce current oil production. Can they do that with a constant tax on oil production? What must be true of any of tax profile which accomplishes the policy makers goal? Suppose instead the cost function equals y = ka + 1 for any y > 0 but is equal to zero for no production. How do your answers to the above change