Scribd
Upload
1 views4 pages

Problem Set 6

The document presents a problem set related to economics, focusing on rental housing, teenage labor, chocolate brownies, and rice markets. It includes calculations for equilibrium rent, wage rates, shortages, and effects of taxes and subsidies. Key findings include equilibrium rent of $450 for rental housing, equilibrium wage of $6 for teenage labor, and specific outcomes for chocolate brownie pricing under taxation.

Uploaded by

f7djrpw4cc
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
1 views4 pages

Problem Set 6

The document presents a problem set related to economics, focusing on rental housing, teenage labor, chocolate brownies, and rice markets. It includes calculations for equilibrium rent, wage rates, shortages, and effects of taxes and subsidies. Key findings include equilibrium rent of $450 for rental housing, equilibrium wage of $6 for teenage labor, and specific outcomes for chocolate brownie pricing under taxation.

Uploaded by

f7djrpw4cc
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Problem Set 6

Use Figure 6.1, which shows the market for rental


housing in Townsville, to work Problems 1 and 2.
1.​ a.​ What are the equilibrium rent and
equilibrium quantity of rental housing?
Equilibrium Rent is 450, and Equilibrium quantity is
20,000
b.​ If a rent ceiling is set at $600 a month, what is
the rent paid? What is the shortage of
housing?
Due to the rent ceiling being above equilibrium,
there would be no change in rent paid or a
shortage or housing.
2.​ If the rent ceiling is $300 a month, what is the
quantity rented, the shortage of housing, and
the maximum price that someone is willing to
pay for the last unit of housing available?
Quantity rented= 10,000
Shortage= 10,000
Maximum price=300

Use the following data on the demand and supply


schedules of teenage labor to work Problems 3 ​ Quantity Quantity​
and4. Wage rate​ demanded supplied
(dollars per (hours per month)
3.​ Calculate the equilibrium wage rate, the
hour)
hours worked, and the quantity of
unemployment. 5 2,500 1,500
6 2,000 2,000
Equilibrium wage= 6 dollars a hour, 7 1,500 2,500
Unemployment is zero 8 1,000 3,000
4.​ The minimum wage for teenagers is $7 an
hour,
a.​ How many hours are unemployed?
1000
b.​ If the demand for teenage labor increases by 500 hours a month, what is the wage rate and
how many hours are unemployed?
The Wage rate would be 6.5 hours and 500 hours would be unemployed
5.​ The table sets out the demand and supply
Price ​ Quantity Quantity​
schedules for chocolate brownies.
(cents per demanded supplied
a.​ If sellers are taxed 20¢ a brownie, what is brownie) (millions per day)
the price and who pays the tax?
50 5 3
70 cents and the tax is split equally
60 4 4
b.​ If buyers are taxed 20¢ a brownie, what is 70 3 5
the price and who pays the tax? 80 2 6
50 cents and the tax is split equally

Use the following data to work Problems 6 and 7.


Price ​ Quantity Quantity​
(dollars per demanded supplied
box) (boxes per week)
1.20 3,000 1,500
1.30 2,750 2,000
1.40 2,500 2,500
1.50 2,250 3,000
1.60 2,000 3,500
The demand and supply schedules for rice are in the table.
Calculate the price, the marginal cost of rice, and the quantity produced if the government
6.​ Sets a production quota of 2,000 boxes a week.
Price= 1.40| Quantity Produced=2000 boxes a week| Marginal Cost= 1.30
7.​ Introduces a subsidy of $0.30 a box.
Price=1.70 | Quantity Produced= 2500 boxes a week| Marginal Cost= 1.40
8.​ Figure 6.2 shows the market for an illegal good.
​ Calculate the market price and the quantity
bought if a penalty of $20 a unit is imposed on
a.​ Sellers only or buyers only.
Market Price= 60$, Quantity= 110
You can't tax illegal goods.
b.​ Both sellers and buyers.
Market Price= 60$, Quantity= 110
You can't tax illegal goods.

You might also like