Joe is looking to expand his tiger collection. The market for white tigers has the following market demand and market supply functions:

D(P) = 200 − 2P and S(p) = 6P − 120

a. Graph the market supply and demand curves and solve for the equilibrium price and quantity of white tigers. Label your graph and remember to put price on the y-axis.

b. A tax of $10 per tiger is imposed on suppliers. What is the new market price and quantity as a result of the tax?

c. Find the value of consumer surplus, producer surplus, tax revenue, and economic welfare after the tax was implemented.

d. Finally calculate the deadweight loss created by the tax

Supply: p= q Demand: p= 200-q

25.The government enacts a price ceiling of $120. What is the new Consumer Surplus?

A)$10,000 (B)$1,000 (C)$2,225 (D)None of the above

26.Assume now that the government enacts a price ceiling of $20. What is the new consumer Surplus?   

A)$3,200 (B)$3,400 (C)$312.50 (D)$6,400

27.When the price ceiling is $20, consumer surplus declines, compared to the marketequilibrium. Why?

(A)The lower prices do not overcome reduced quantity (B)The lower quantity does compensate for higher prices (C)Both A and B

(D)The lower prices create a marginal elasticity of demand

28.What is the Deadweight Loss from a price ceiling of $20?

(A)$3,200 (B)$3,400 (C)$10,800 (D)$6,400

29.What is the Producer Surplus under a price ceiling of $20?

(A)$400 (B)$200 (C)$100 (D)$166.67

30.Which of the following policies is an example of a price ceiling?

(A)Rent controls (B)Minimum wages (C)Taxes (D)Subsidies

Suppose the nomianal interest rate for 1-year borrowing and lending in the U.S (i$) is currently 5%,while the nominal interest rate on 1 -year borrowing and leading in the U.K (1£) is 3%. Suppose,too, that nominal British pound/U.s. dollar exchange rate is to be £1.60/$ next year (i.e-1(£/$)e= £1.60/$).

A.According to the theory of Interest Rate Parity, what is the current equilibrium nominal exchange rate between the pound and the dollar (E0(£/$))?

B. All else equal, if the U.S. interest rate increased to 8%, what would be the new equilibrium

exchange rate?

C.All else equal (i.e. with both i$and E eat their initial levels), if the U.K. interest rate increased to 8%, what would the new equilibrium exchange rate be?

You have just been appointed to a special Presidential Task Force on Economic Growth. You are responsible for proposing three policies that the government can enact to increase the growth rate. What policies would you recommend and why?

One of the Principles of economics “Markets Are Usually A Good Way to Organize Economic Activity”. Based on your understanding of this principle, first, explain in detail the idea behind this principle. Second, how the resources and economic activity organized under socialism and capitalist systems. Third, in your opinion, which system that you believe is better in the allocation of resources as well as Organize Economic Activity

500 MINIMUM

Today and due to the spread of COVID19, we can observe that some sectors in an economy are expanding will others contracting. Using the demand-supply framework, give an example for one industry that is growing and one industry that is shrinking. Use the graphs to explain your idea and demonstrate why this is happening.

800 WORDS MINIMUM

Q.1; The Fed’s “dual mandate” includes ______, and the policy instruments available to the Fed as it tries to achieve its dual mandates _______ .

a. zero inflation and moderate long-term interest rates; the government budget deficit or surplus

b. maximum economic growth and zero inflation; the federal funds rate

c. maximum aggregate demand and aggregate supply; government expenditure on goods

d. maximum employment and stable prices; the federal funds rate.

Q.2; One of the major reasons why the United States exports jet airplanes is:

a. the U.S. can sell jet airplanes at a higher price than other nations.

b. the U.S. owns more physical endowments, such as mineral resources, than other countries.

c. foreign nations have a higher opportunity cost of production of jet airplanes.

d. the U.S. is able to outproduce other countries in jet airplanes.

1. How did President Truman’s containment policy differ from the Marshall Plan?

2. How did President Eisenhower manage U.S. foreign affairs?   

Suppose that firms A,B,C and D are Bertrand duopolists in the salt industry. The market demand curve can be specified as Q=100-3p, Q=qA+qB+qC+qD. The cost of firm A is C(qA)=7qA The cost of firm B is C(qB)=3qB The cost of firm C is C(qC)=7qC The cost of firm D is C(qD)=5qD

Firm A will earn?

Firm B will earn?

Firm C will earn?

Firm D will earn?

A dominant or price setting firm and several smaller price takers serve a market where total market demand is Qd = 560 – 2P and the combined supply from all the smaller firms is Qs = - 60 + 2P.

1. State the demand (Q_df=) and inverse demand (P_df=) function for the dominant firm (df).

2. If the dominant firm decides to produce 220 units, determine the price (P) it will set for the market and the (combined) quantity supplied by all the small firms (Qs).

3. Does this market meet the assumptions that the dominant firm has at least a market share of 50%? (you must motivate your answer numerically)

What is the business cycle? Explain.

What is fiscal policy?

What are the tools of fiscal policy?

Explain how fiscal policy can be used in a recession and provide an example from our recent economic history.

Social Cost

Why don't firms and markets naturally take into consideration social costs?

1. Suppose Sara is risk averse and wants to insure her​ store, which is worth ​$120,000. There is a 25% probability that her store will burn next year. If a fire​ occurs, the store will be worth only ​$60,000. The local government assesses a property tax of ​$4,000 on​ Sara's store. If the tax is collected whether or not the store​ burns, how much fair insurance does Sara​ buy? If the tax is collected only if the store does not​ burn, how much fair insurance does Sara buy?
2. What type of risk behavior does the person exhibit who is willing to pay $5 for the chance to bet $60 on a game where 20% of the time the bet returns $100, and 80% of the time returns $50? Explain.