Homework 微观经济练习.docx

This is a group assignment. You can arrange your own groups. Due: Monday November 21st, 10am.Please turn in your homework to class captain/monitor. He/she will turn in everything to Mr. Tao in Office 104 by 10am. Be sure to turn in your homework before that time. Late submission will receive NO credit. Please PRINT your homework. NO handwritten work will be accepted. If you have any questions, you can email me at . All questions must be submitted before the end of Saturday, otherwise they will NOT be answered. There are 10 pages total, including this one. Class Number: Group member 1 & student ID: Group member 2 & student ID: Group member 3 & student ID: Group member 4 & student ID: Group member 5 & student ID: Group member 6 & student ID: Multiple Choice (2pts X 20 = 40pts). Please write down your choice next to the number of the question. 1.Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Thena.you should buy more tomatoes before the end of the week.b.you already have bought too many tomatoes this week.c.your consumer surplus on the last tomato you bought is zero.d.your consumer surplus on all of the tomatoes you have bought this week is zero.Table 1The only four consumers in a market have the following willingness to pay for a good:BuyerWillingness to PayCarlos$15Quilana$25Wilbur$35Ming-la$452.Refer to Table 1. Who experiences the largest loss of consumer surplus when the price of the good increases from $20 to $22?a.Quilanab.Wilburc.Ming-lad.All three buyers experience the same loss of consumer surplus.3.Consider the following problems: Overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of the wild rhinoceros. What do these problems have in common?a.Private markets could easily solve them if governments left the markets alone.b.They would all go away if the government sponsored an intensive public-information campaign.c.They are all the result of a failure to establish clear property rights over something of value.d.They are all the result of a failure of corrective taxes.4.Which of the following statements is not correct?a.Patents help internalize the externalities associated with technological advances.b.Economists typically prefer regulations to corrective taxes because regulations provide more incentives for firms to seek continued reductions in pollution.c.Allowing firms to trade pollution permits will lower the total cost of reducing pollution.d.A big impediment to implementing the Coase theorem in many cases is high transactions costs.5.Which of the following will cause a decrease in producer surplus?a.the imposition of a binding price ceiling in the marketb.an increase in the number of buyers of the goodc.income increases and buyers consider the good to be normald.the price of a complement decreases6.The deadweight loss from a $3 tax will be largest in a market witha.inelastic supply and elastic demand.b.inelastic supply and inelastic demand.c.elastic supply and elastic demand.d.elastic supply and inelastic demand.7.Which of the following ideas is the most plausible?a.Tax revenue is more likely to increase when a low tax rate is increased than when a high tax rate is increased.b.Tax revenue is less likely to increase when a low tax rate is increased than when a high tax rate is increased.c.Tax revenue is likely to increase by the same amount when a low tax rate is increased and when a high tax rate is increased.d.Decreasing a tax rate can never increase tax revenue.8.When a nation first begins to trade with other countries and the nation becomes an importer of corn,a.this is an indication that the world price of corn exceeds the nations domestic price of corn in the absence of trade.b.this is an indication that the nation has a comparative advantage in producing corn.c.the nations consumers of corn become better off and the nations producers of corn become worse off.d.All of the above are correct.9.When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?a.The price paid by domestic consumers of the good increases.b.The price received by domestic producers of the good increases.c.The losses of domestic consumers of the good exceed the gains of domestic producers of the good.d.The gains of domestic producers of the good exceed the losses of domestic consumers of the good.10.The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production. These taxesa.benefit the United States as a whole, because they generate revenue for the government. In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.b.benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.c.harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.d.harm the United States as a whole, because they reduce producer surplus by an amount that exceeds the gain in consumer surplus and government revenue.11.Suppose that electricity producers create a negative externality equal to $6 per unit. Further suppose that the government imposes a $8 per-unit tax on the producers. What is the relationship between the after-tax equilibrium quantity and the socially optimal quantity of electricity to be produced?a.They are equal.b.The after-tax equilibrium quantity is greater than the socially optimal quantity.c.The after-tax equilibrium quantity is less than the socially optimal quantity.d.There is not enough information to answer the question.12.Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If there are no government subsidies for MBAs, then which of the following statements is correct?a.The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs.b.The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs.c.The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs.d.There is not enough information to answer the question.13.Mary and Cathy are roommates. Mary assigns a $30 value to smoking cigarettes. Cathy values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem?a.Cathy offers Mary $20 not to smoke. Mary accepts and does not smoke.b.Mary pays Cathy $16 so that Mary can smoke.c.Mary pays Cathy $14 so that Mary can smoke.d.Cathy offers Mary $15 not to smoke. Mary accepts and does not smoke.14.Highway engineers have proposed improving a dangerous stretch of highway at a cost of $1.5 million. They expect that it will reduce the risk of someone dying in an accident over the life of the highway from 18.3 percent to 7.8 percent. The project would be worth doing as long as a human life is worth at leasta.$117,000.b.$157,500.c.$274,500.d.$1.5 million.15.Which of the following is an example of the free-rider problem?a.Both Fred and Wilma receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care.b.Elmer receives a free lunch from the local Meals on Wheels program because of his low monthly income. Yet his next door neighbor, Dorothy, is not eligible for the free lunch.c.Max owns Fido, a large dog who barks whenever anyone walks near his house. Sally lives next to Max, and Fidos barking can be heard whenever anyone walks near her house, too. Thus, Sally receives free protection from burglars because of Fidos barking.d.David purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.16.Which of the following statements is not correct?a.Environmental degradation is an example of the Tragedy of the Commons.b.Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good.c.Some goods, such as lighthouses, may be either private or public goods.d.The free-rider problem prevents governments from supplying public goods.17.Before considering any public project, the government should(i)compare the total cost and total benefits of the project.(ii)conduct a cost-benefit analysis.(iii)infer that citizens who vote for a project are willing to pay equally for it.a.(i) onlyb.(ii) onlyc.(i) and (ii) onlyd.(i), (ii), and (iii)18.On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that a.every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient.b.it would be more efficient if the electric company raised its rates for electricity at peak times.c.it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times.d.it would be more efficient to force everyone to cut their usage of electricity by the same amount.19.Assume the supply curve for cigars is a typical, upward-sloping straight line, and the demand curve for cigars is a typical, downward-sloping straight line. Suppose the equilibrium quantity in the market for cigars is 1,000 per month when there is no tax. Then a tax of $0.50 per cigar is imposed. The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40. The governments tax revenue amounts to $475 per month. Which of the following statements is correct?a.After the tax is imposed, the equilibrium quantity of cigars is 900 per month.b.The demand for cigars is more elastic than the supply of cigars. c.The deadweight loss of the tax is $12.50.d.The tax causes a decrease in consumer surplus of $380.20.Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?a.Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.b.Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50.c.Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50.d.Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.Integrated Task 1 (14pts)Table 2 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.First OrangeSecond OrangeThird OrangeAlex$2.00$1.50$0.75Barb$1.50$1.00$0.80Carlos$0.75$0.25$01.Refer to Table 2. If the market price of an orange is $1.20, what is the market quantity of oranges demanded per day? Show support to your answer. (2pts)2.Refer to Table 2. The market quantity of oranges demanded per day is exactly 5 if the price of an orange, P, satisfies (2pts)a.$1.00 P $1.50.b.$0.80 P $1.50.c.$0.80 P $1.00.d.$0.75 P $0.80.3.Refer to Table 2. If the market price of an orange is $1.20, what is consumer surplus? Show your calculation. (2pts)4.Refer to Table 2. If the market price of an orange increases from $0.60 to $1.05, what is the change to total consumer surplus? Show your calculation. (2pts)5.Refer to Table 2. Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40? Show your calculation. (2pts)6.Refer to Table 2. Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75? Show your calculation. (2pts)7.Refer to Table 2. Which of the following statements is correct? (2pts)a.Neither Barbs consumer surplus nor Carloss consumer surplus can exceed Alexs consumer surplus, for any price of an orange.b.All three individuals will buy at least one orange only if the price of an orange is less than $0.25.c.If the price of an orange is $0.60, total consumer surplus is $4.90.d.All of the above are correct.Integrated Task 2 (16pts) Show your calculation Figure 1 The vertical distance between points A and B represents a tax in the market.1.Refer to Figure 1. What is the change in quantity if tax is imposed? (1pt)2.Refer to Figure 1. What is the amount of tax revenue received by the government? (1pt)3.Refer to Figure 1. What is the amount of deadweight loss as a result of the tax? (2pts)4.Refer to Figure 1. What is the loss of consumer surplus as a result of the tax? (2pts)5.Refer to Figure 1. What is the loss of producer surplus as a result of the tax? (2pts)6.Refer to Figure 1. What is the loss of consumer surplus associated with marginal buyers? (2pts)7.Refer to Figure 1. What is the loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed? (2pts)8.Refer to Figure 1. What is the loss of producer surplus associated with marginal seller? (2pts)9.Refer to Figure 1. What is the loss of producer surplus for those sellers of the good who continue to sell it after the tax is imposed? (2pts)Integrated Task 3 (14pts) Figure 21.Refer to Figure 2. If this market is currently producing at Q4, then what should be the quantity to maximize total economic well-being? (1pt) 2.Refer to Figure 2. If all external costs were internalized, then what should be the markets equilibrium output? (1pt) 3. Refer to Figure 2. Without government intervention, what would be the equilibrium quantity? (1pt)4.Refer to