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I NEED ANSWERS FOR THESE TWO QUESTIONS Q.4 Suppose that the supply and demand for good H is described by the following equations: Q'= -

I NEED ANSWERS FOR THESE TWO QUESTIONS

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Q.4 Suppose that the supply and demand for good H is described by the following equations: Q'= - 150+0.40P QP = 600-0.2P The production of H also creates marginal external costs of $165 per unit of H. Assuming that H is sold in a competitive market, what is the market price? How many units of good H will be produced per year at that price? What is the socially efficient output of H? Will taxing H @12.5 percent be socially optimal? What alternate tax policy you can suggest to achieve social efficiency? Also calculate the incidence of each of the taxes. Q.5 Suppose that the production of goods X and Y is described using the production functions: X = BL. Kr Y =(2 \\ Ly +2 \\Ky )x2 Determine the competitive equilibrium and the social equilibrium. Also calculate the rate of the Pigouvian subsidy to correct for the misallocation of resources under competitive equilibrium

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