# economic

posted by .

ASSIGNMENT 5: DUE 4.00PM, 4/09/08
1. A competitive firm uses coal to generate electricity. Its supply curve is Q = 300P
- 1000, where Q is quantity produced (units of electricity per year), and P is
market price of electricity per unit. The production of each unit of electricity
results in a tonne of sulphur dioxide emissions which is estimated to cost the
economy \$31. If the market price of electricity is \$45 per unit, what is the
optimal level of output from the viewpoint of:
a. The firm? [2 marks]
b. The economy as a whole? [2 marks]
c. If the firm is producing the economy¡¯s optimal output level, what price
should be used to represent the value of an extra unit of output of electricity
to the economy as a whole? [2 marks]
[6 marks]
2. Assuming that shoes have a world price of US\$60 a pair, that the EU has a 45%
ad valorem import duty on footwear which applies to all types of footwear and
an Italian company is proposing a project to substitute 150,000 pairs of
imported shoes by domestically produced shoes. The annual cost of the project
(operating cost plus annual equivalent capital cost) at both market and
efficiency prices are \$9.4 millions. Apart from the tariff there are no other
distortions to the EU domestic price of shoes. Calculate the net annual benefit
of the project:
a. At market prices. [2 marks]
b. At efficiency prices. [2 marks]

3. An ad valorem tax of 15% applies to sports shoes which have a market price
(i.e. price including the tax) of \$46 per pair. What price (give the value in
dollars) should be used for a pair of sport shoes in an efficiency benefit-cost
analysis under each of the following sets of circumstances: [0.25 mark each]
a. The tax is distortionary and the commodity is a project output which
replaces existing supply;
b. The tax is distortionary and the commodity is a project output which satisfies

• economic -

First do a little research, then take a shot. What do you think?

• economic -

don get it

• economic -

why don't you post your solution,perhaps i can refer . i need to pass up by tomorrow

## Similar Questions

1. ### Economic - Cost and benefit analysis

i am not a spoon feeder, i just don't have any idea about these messy questions. ASSIGNMENT 5: DUE 4.00PM, 4/09/08 1. A competitive firm uses coal to generate electricity. Its supply curve is Q = 300P - 1000, where Q is quantity produced …
2. ### Economics~~URGENT!!!

i am not a spoon feeder, i just don't have any idea about these messy questions. ASSIGNMENT 5: DUE 4.00PM, 4/09/08 1. A competitive firm uses coal to generate electricity. Its supply curve is Q = 300P - 1000, where Q is quantity produced …
3. ### Economics/Math

Suppose there are four firms in a competitive market and that each firm has the following supply function. Supply functions for competitive firms Company Supply Function 1 Q1 = 16 + 4P 2 Q2 = -5 + 5P 3 Q3 = 32 + 8P 4 Q4 = - 60 +10P …
4. ### ECON

demand for sulfur dioxide by coal-fired electricity electricity producers is: P= 1,000 - 16Q where Q is quantity of sulfur dioxide measured in thousands of tons, and P is price per ton of sulfur dioxide. a)With no policies or restrictions …
5. ### Econ - more help please

demand for sulfur dioxide by coal-fired electricity electricity producers is: Firm A's demand: P= 1,000 - 80 Q Firm b's demand: P= 1,000 - 20 Q where Q is quantity of sulfur dioxide measured in thousands of tons, and P is price per …

demand for sulfur dioxide by coal-fired electricity electricity producers is: Firm A's demand: P= 1,000 - 80 Q Firm b's demand: P= 1,000 - 20 Q where Q is quantity of sulfur dioxide measured in thousands of tons, and P is price per …
7. ### econ

Suppose there are 1000 identical firms producing diamonds. Diamond miners receive the wage rate w. Assume that the short-run cost function for each diamond-producing firm is C(q) = wq + q2. a. If w = 10, what is the supply curve of …
8. ### econ

Suppose there are 1000 identical firms producing diamonds. Diamond miners receive the wage rate w. Assume that the short-run cost function for each diamond-producing firm is C(q) = wq + q2. a. If w = 10, what is the supply curve of …
9. ### Economics

a firm in a purely competitive industry is currently producing a 1000 unir per day at a total cost of \$450. if the firm produced 800 units per day, it total cost will be \$300, and it it produced 500 units per day, it total cost will …
10. ### economic

find the competitive price and quantity (as if the above marginal cost curve represents the market supply curve. given the market demand equation P=100-.1Q and TC=1000+20Q+.4Q^2

More Similar Questions