Micro Econ

Topics: Supply and demand, Monopoly, Economics Pages: 2 (496 words) Published: December 5, 2012
1. The state of California recently considered passing a tax on the services of doctors in that state in order to raise revenue to pay for universal health coverage for California residents. Suppose the average open heart surgery costs $100,000, and at that price 23,339 surgeries are performed each year. Fully explain what the most likely outcome would be in this market if a tax on surgeries is implemented. Use a graph if it will help.

2.
Price Changes and
Responses by Consumers |
Price| Quantity Demanded| Quantity Supplied|
$4.89| 311| 255|
$4.29| 388| 214|
$5.39| 198| 309|
$5.19| 268| 300|
$5.00| 279| 279|

Price Changes and
Responses by Consumers |
Price| Quantity Demanded| Quantity Supplied|
$4.89| 311| 255|
$4.29| 388| 214|
$5.39| 198| 309|
$5.19| 268| 300|
$5.00| | |

Price Changes and
Responses by Consumers |
Price| Quantity Demanded| Quantity Supplied|
$4.89| 311| 255|
$4.29| 388| 214|
$5.39| 198| 309|
$5.19| 268| 300|
$5.00| 279| 279|

1. Assume that electricity production has been done by several regional firms in the US, each operating as a pure monopoly. 2. Explain and graphically illustrate how the electrical monopolist would determine its profit maximizing price and output level. * Identify the area of consumer and producer surplus for the profit maximizing monopoly. * Identify the deadweight loss for the monopolist.

1. Now assume the federal government imposes a regulation on the monopoly. 2. Show and explain how the electrical monopolist would determine its profit-maximizing price and output level. * Identify the area of consumer surplus and producer surplus for the profit maximizing monopoly. * Identify the deadweight loss for the regulated monopolist. 1.  Now the federal government decides to deregulate the market for electricity nationwide. 2. Show and explain how de-regulation will impact price...
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