$ 4 10 1 10 Q Assume that bottled water and local well water are perfect substitutes for drinking purposes. The bottled water, however, is considerably more expensive – $3.00 versus $1.00 per gallon. Assume that a toxic pollutant has contaminated the local well water. Assume there are no other uses for the well water beyond drinking purposes and that the community's aggregate inverse demand for drinking water is: P = 10 - Q where Pis the price of drinking water and Q is gallons of water (in millions). Using the information calculated in previous questions, what is the community's willingness to pay to clean up the well? Please show the calculations you use to arrive at your answer. 3.
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- Suppose that the government wishes to encourage the manufactureand sale of small cars. The current supply and demand of small carsare: Qs = −(10/9) + (1/9)P; Qd = 100 − P, where Q is in millions ofcars and P is in hundreds of dollars.Now, suppose that the government is considering two alternative plansfor encouraging small car sales. Under Plan A, every car manufacturerwill receive a $500 rebate from the government for each car sold. Underplan B, every purchaser of a small car will receive a $500 rebate fromthe government.Which of the plan is more effective in encouraging sales? Show bycomputing the equilibrium quantity under each plan.Q2. Suppose the government wants to reduce the consumption of alcohol in the market byintroducing a tax per bottle on the supplier's side. The government does not know what thedemand curve looks but knows that prior to the tax, the equilibrium is at point E1, for all theconsumers in the market. Suppose there are two scenarios of alcohol consumers in the market: i) an extremely inelastic demand curve for additive adult drinkersii) a demand curve that is moderately elastic for young drinkers Please show your answer directly to a well labeled figure and explain what would occur underthese two scenarios after adding the tax on the supplier's side, and on which scenario groupthis tax would best work for the government's objective?1. For the demand function Qd = a - bP and the supply fuction Qs = dP - c, using Cramer's rule determine the equilbrium price and equilibrium quantity. 2. In calm waters, the oil spilling from the ruptured hull of a grounded tanker spreads in all directions. Assuming that the area polluted is a circle and that its radius is increasing at a rate of 2ft/sec, determine how fast the area is increasing when the radius of the circle is 40ft. 3. A firms production function is Q(L) is 15L2 - 0.1L3, where output (Q) is a fuction of a single input labour (L) I. Find the number of workers required to maximize total product. II. For what number of workers is average product maximum
- A more precise description of the demand conditions show that it also depends on a number of other factors, including the CO2 quota price, the interest rate and the price of electricity in the Nordic wholesale market, Nordpool. An overall demand function can thus be described as: Q = 33.33 - 0.000004167 * P + 0.04167 * PCO2 - 0.4167 * r - 0.00833 * Pel, where Q is the quantity sold, P is the price, PCO2 is the price of the EU's CO2 quotas, measured in euros per tonnes, cf. Chart 1, r is the banks' average lending rate measured in per cent. pa., and Pel is the Nordpool wholesale price of electricity excl. network and system tariffs as well as charges, measured as Danish kroner per MWh (mega-watt-time). P can here be set to DKK 4,000,000, PCO2 can be set to 62, r to 2.37 and Pel can be set to 250. Define the concept of price elasticity more generally and calculate the price elasticity as well as the cross-price elasticities with regard to the CO2 price, the interest rate…Suppose a town is planning to construct a new public park. Based on some market research, they have determined that the town’s 50 residents can be divided into two types with respect to their benefit from this public good. 20 of the town’s residents are of Type 1 and the other 30 residents are of Type 2. Each resident's individual demand for acres of park space is given by: Type 1: QD = 20 – P Type 2: QD = 40 – 2P a. Solve for the aggregate demand of the towns 50 residents as a function of the number of acres. Be sure to write down equations for each section of the aggregate demand curve, as well as the interval of quantities each section spans. b. Graph the aggregate demand curve calculated in part a. Make sure to label both intercepts, slopes, and the intersection of the two sections.The demand and supply functions for stylus pens are given by P = 100 - Q and P = 20 + 5Q, respectively.Now the government imposed a $10 per unit tax on stylus pens collected from sellers. What are themarket equilibrium price and quantity of stylus pens before imposing the tax? What are the marketequilibrium price and quantity of stylus pens after imposing the tax? What is the tax burden imposed onbuyers and sellers, respectively?
- Suppose the market demand for milk is Qd = 40 – 4P Where Qd is millions of gallons demanded and P is price per gallon. Suppose the market supply for milk is Qs = - 40/3 + 20/3P Suppose demand for milk is relative elastic and demand for gasoline is relatively inelastic. Holding all else constant, A.taxing milk will generate lower deadweight losses than the same tax on gasoline. B.taxing milk will generate the same deadweight losses relative the same tax on gasoline. C.taxing milk will generate greater deadweight losses than the same tax on gasoline.Let the following demand and supply equations be respectively:D = 5p ́ ́-4p ́ + 11S = 6p ́ ́-2p ́ + 5p-4Find p (t) with the hypothesis that the market is in equilibrium with the conditionsinitials p (0) = 4 and p ́ (0) = 7When the price is 10 TL for each pack of cookies, the supply is 250 thousand and the demand is 120 thousand boxes. When the price is 9,5 TL for each pack of cookies, the supply is 200 thousand and the demand is 240 thousand boxes. Since the price-demand and supply-demand equations are linear; Calculate the producer and consumer annuity and find and interpret the market equilibrium point after-tax if the consumer is taxed at a rate of 0,75 TL per product.
- Consider two consumers with preferences Where Ti is the tax levied in jurisdiction i and Gi is public good provision. Assume a2 > a1. The level of public good in each region is decided by majority voting of its residents. If there are two residents, assume that the supply is the average of the preferred quantities of the residents. a. Show that the preferred quantity of public good for consumer h if they locate in jurisdiction i is given by Gh = niah; where ni is the jurisdiction population. b. Assuming consumers correctly predict the consequences of location choice, show that there is no equilibrium if c. Show that there is an equilibrium if consumers take provision levels as given.If Compressed Natural Gas (CNG) powers vehicles and is an almost pollution-free fuel. If factory equipped, vehicles can switch between using either CNG or ordinary gasoline. It costs under $4000 extra to buy such a factory-equipped auto. However, the auto industry makes little effort to promote the use of CNG. Instead, the auto industry is rushing to introduce battery-powered autos that use expensive, heavy and dangerous Lithium Ion batteries. Suppose the government sufficiently subsidized the installation of CNG pumps at public service stations. QUESION: Would the effect on demand for CNG powered autos INCREASE OR DECREASE?The equation of demand is Q=10000-5p, supply is Q=-2000+10p Q represents the quantity of houses on the market and P the rental price. The equilibriumrental price equals 800 euros per month. If the government gives people a housing allowance of 300 euros per month,What are the effects of each measure for both house owners and people renting ahouse? And what are the consequences for the government? Analyse the measuresgraphically and mathematically.