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NAME: ECON 306 First Exam, Fall 2021 Write the answer to questions in the box or space provided. Each question is 1 point unless otherwise marked. There are a total of 16 questions (20 points total). The last page is left blank and can be removed and used as scratch paper. A consumer has the following utility function: U(q1,q2)= 91 927 The prices and income are p1=10, p.=5, and y=100. 1. (2 points) Find the MRS equation for this consumer. MRS = -3q:/2q: (leaving out the negative sign is OK) 2. (2 points) Write the budget constraint using the income and prices given. 10q + 5q2 = 100 3. (2 points) Find the consumer's optimal bundle. Algebra: Set 3q:/2q: = 10/5, and so q2 = 4q./3. Then the BC is 10q: + 5(4q1/3)=100. 50q,/3=10. And so we get... q: = 92 =_ 8_ 4. In the blackberry market, the quantity demanded and the quantity supplied is given by Q = 1600 -400P and Qs = 200P + 100 What is the equilibrium price and quantity? 600 P=_ 2.5 (1/2 point for getting one of the two blanks correct) 5. Suppose a tax of $3 per unit is imposed on buyers in the market. The equilibrium price and quantity are now Q'= 200 p'= 0.5 (1/2 point for getting one of the two blanks correct) 6. The tax burdens (per unit bought or sold) are Burden on Buyers = Burden on Sellers = _2 7. Suppose the $3 tax was collected from sellers instead of the buyers. Then, a. the burden on buyers and sellers would be the same as above b. the burden on sellers would decrease and on buyers would increase C. the entire burden would fall on buyers d. the entire burden would fall on sellers the burden would be shared equally between buyers and sellers 1