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The market for deep fried croissants is given by: Demand: P = 44 -1Q Supply: P = 10 Suppose that the government imposes a tax of $6.6 per deep fried croissant to discourage unhealthy eating patterns. in an attempt to hit back and recoup their profits, the deep fried croissant industry launches a wide-scale marketing campaign that successfully generates hype around their product, causing its demand to surge to P : 71 1Q, By how much has producer surplus increased, relative to before the implementation of the tax? 0 a. $310.92 C b. $276.42 C c. $51842 Q d. $535.63 Suppose that in the cigarette market in Paris, the demand curve is given by P = 6r 0, and the supply curve is given by P = 2Q, where 0 represents millions of cigarettes. Further, suppose that smoking cigarettes produces an additional cost for Paris residents valued at $5 per million cigarettes. What is the privately optimal price of cigarettes (in millions}? Answer: l l The market for hamburgers is given by: Demand: P : 19 0.40. Supply: P = 1.40 If the government imposes a $9 per hamburger tax on producers. How much of the tax revenue is a transfer of surplus from the consumers to the government? 0 A.$ 11.11 0 B. $ 2.00 O C. $9 0 D. $ 2.78 O E. $ 27.78 Sarah is a bartender earning $24.5 an hour. Her new favourite Video game hasjust been released and costs $71. She is considering whether to buy it, call in sick for a 2hourlong shift and play it. If she goes to work, she expects to earn an additional $51 in tips. She could also go to the pool for a swim and a sauna session, which she values $35. What is Sarah's opportunity cost of buying and playing the new video game? Three ducks, Huey, Dewey, and Louie, are squawking about how big of a pond they should purchase together. Huey and Louie's individual demand curves are given by: Huey: P : 85.6 - 8Q Louie: P =171.2 * 16G The price per square metre of pond is $38.4, and the socially optimal size of the duck pond is 9.9 square metres. Assume that the aggregate demand is a straight line: this implies that the individual demand curves of the 3 ducks intercept the xaxis in the same point. ltthe ducks choose the pond size independently, how many square metres will the pond be? 0 a. 10.70 0 b. The pond will not be purchased. 0 c. 8.30 Q d. 9.10 The demand in Australia for slippers is given by P = 59 7 Q. where Q is in tens of thousands. Supply for slippers is given by P = 0/2. where again Q is in tens of thousands.The world price is $6, and Australia is open to trade. What size quota will raise the domestic price for slippers to $9? Write the value in tens of thousands of slippers. Answer: l l