Supply and Demand and Marks
ECON1002 Assignment
Attempt all questions.
Type
your answers using Microsoft Word. Upload the file to the course website by the deadline date.
Alternatively, you may write your answers in pen.
If you do so, then you will have to scan your answers, as pdf files preferably, and upload the file to the link on the course website. DEADLINE: Mar 31 at 5:00 pm ECT.
1.
Consider the following policies, each of which is aimed at reducing violent crime by reducing the use of guns. Illustrate the effect of each of these proposed policies in a demand and supply diagram of the gun market. For each question, show the price paid by consumers, the price received by producers, and the quantity of guns sold. What is the difference between the price paid by consumers and the price received by producers?
Has the number of guns sold increased or decreased?
a.
b.
c.
d.
2.
A tax on gun buyers
A tax on gun sellers
A binding price floor on guns
A tax on gun ammunition
Below are some data from the land of milk and honey:
Year
2007
2008
2009
a.
b.
c.
3.
[5 marks]
[5 marks]
[5 marks]
[5 marks]
Price of
Milk
$1
$1
$2
Quantity of Milk
(Quarts)
100
200
200
Price of
Honey
$2
$2
$4
Quantity of Honey
(Quarts)
50
100
100
Compute nominal GDP, real GDP, and the GDP deflator for each year using 2009 as the base year.
[12 marks]
Compute the growth in nominal GDP, real GDP, and the GDP deflator in 2008 and 2009. For each year, identify the variable that does no change. Explain your answers. [10 marks]
Did economic well-being rise more in 2008 or 2009? Explain.
[3 marks]
Suppose you are given the following information:
Qs = 100 + 3P
Qd = 400 – 2P
Attempt all questions.
Type
your answers using Microsoft Word. Upload the file to the course website by the deadline date.
Alternatively, you may write your answers in pen.
If you do so, then you will have to scan your answers, as pdf files preferably, and upload the file to the link on the course website. DEADLINE: Mar 31 at 5:00 pm ECT.
1.
Consider the following policies, each of which is aimed at reducing violent crime by reducing the use of guns. Illustrate the effect of each of these proposed policies in a demand and supply diagram of the gun market. For each question, show the price paid by consumers, the price received by producers, and the quantity of guns sold. What is the difference between the price paid by consumers and the price received by producers?
Has the number of guns sold increased or decreased?
a.
b.
c.
d.
2.
A tax on gun buyers
A tax on gun sellers
A binding price floor on guns
A tax on gun ammunition
Below are some data from the land of milk and honey:
Year
2007
2008
2009
a.
b.
c.
3.
[5 marks]
[5 marks]
[5 marks]
[5 marks]
Price of
Milk
$1
$1
$2
Quantity of Milk
(Quarts)
100
200
200
Price of
Honey
$2
$2
$4
Quantity of Honey
(Quarts)
50
100
100
Compute nominal GDP, real GDP, and the GDP deflator for each year using 2009 as the base year.
[12 marks]
Compute the growth in nominal GDP, real GDP, and the GDP deflator in 2008 and 2009. For each year, identify the variable that does no change. Explain your answers. [10 marks]
Did economic well-being rise more in 2008 or 2009? Explain.
[3 marks]
Suppose you are given the following information:
Qs = 100 + 3P
Qd = 400 – 2P