economics
Economics 205 Managerial Economics
Fall 2020
Assignment 1
Last Name: [INSERT LAST NAME HERE]
First Name: [INSERT FIRST NAME HERE]
Student Number: [INSERT STUDENT NUMBER HERE]
By signing above, I acknowledge that I have not received help from anyone else on this assignment, nor have I given help to anyone else on this assignment. I understand that any violation of the preceding statement will result in a 0 grade on the assignment as per the Academic Honesty Guidelines for School of Business Students.
Due Date: Wednesday, September 23rd at 11:59PM.
Total Marks: 10 marks; 10% of total course grade.
Dropbox: Submit your assignment as a WORD document in the appropriate D2L dropbox using the following document naming protocol: ECON205_A1_Firstname_Lastname.docx.
Instructions: This is an open book assignment that must be completed individually. You may refer to any course material available on D2L. Please organize your solutions and show all your work this includes inserting shapes in WORD when working with diagrams, using the equation editor in WORD, and providing units where necessary.
Question #1
a. Using the supply and demand model below, carefully explain any changes to the free market equilibrium when the government imposes a binding price ceiling to regulate the market for toilet paper. (5 marks)
Question #2
Consider the following inverse demand function and inverse supply function for iced tea where QD is the number of bottles of iced tea demanded in thousands per week, QS is the number of bottles of iced tea supplied in thousands per week, and P is the price per bottle of iced tea.
P = 5 0.50QD Inverse Demand Function
P = 1.25 + 0.25QS Inverse Supply Function
a. Suppose that the government decides to collect a tax from producers of $0.12 per bottle of iced tea produced. Determine the after-tax price and the after-tax quantity of iced tea. (5 marks)
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