Questions from General Economics

Q: Draw the supply and demand curves for turkey. In the equilibrium

Draw the supply and demand curves for turkey. In the equilibrium, show producer and consumer surplus. Explain why producing more turkeys would lower total surplus.

Q: Draw a demand curve for turkey. In your diagram, show

Draw a demand curve for turkey. In your diagram, show a price of turkey and the consumer surplus at that price. Explain in words what this consumer surplus measures.

Q: Suppose that the government imposes a tax on heating oil.

Suppose that the government imposes a tax on heating oil. a. Would the deadweight loss from this tax likely be greater in the first year after it is imposed or in the fifth year? Explain. b. Would the...

Q: After economics class one day, your friend suggests that taxing food

After economics class one day, your friend suggests that taxing food would be a good way to raise revenue because the demand for food is quite inelastic. In what sense is taxing food a “good” way to r...

Q: Daniel Patrick Moynihan, the late senator from New York, once

Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets. a. Do you expect that this tax would raise much r...

Q: The government places a tax on the purchase of socks.

The government places a tax on the purchase of socks. a. Illustrate the effect of this tax on equilibrium price and quantity in the socks market. Identify the following areas both before and after the...

Q: You are hired as the consultant to a monopolistically competitive firm.

You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maxi...

Q: This chapter analyzed the welfare effects of a tax on a good

This chapter analyzed the welfare effects of a tax on a good. Consider now the opposite policy. Suppose that the government subsidizes a good: For each unit of the good sold, the government pays $2 to...

Q: Hotel rooms in Small town go for $100, and 1

Hotel rooms in Small town go for $100, and 1,000 rooms are rented on a typical day a. To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the g...

Q: Suppose that a market is described by the following supply and demand

Suppose that a market is described by the following supply and demand equations: QS = 2P QD = 300 - P a. Solve for the equilibrium price and the equilibrium quantity. b. Suppose that a tax of T is pla...