1. [Market Equilibrium I]
Find the equilibrium price and quantity for the following markets.
(a)
Qd = 220−5P
Qs = −20+3P.
(b)
Qd −128+9P = 0
Qs +32−7P = 0.
2. [Market Equilibrium II]
Find the equilibrium price and quantity for the following related market for two goods.
(a)
Qd1 = 82−3P1 +P2
Qs1 = −5+15P1.
and
Qd2 = 92+2P1 −4P2
Qs2 = −6+32P2.
(b)
Qd1 = 410−5P1 −2P2
Qs1 = −60+3P1.
and
Qd2 = 295−P1 −3P2
Qs2 = −120+2P2.
Submission deadline: October 18, 2017 in class Page 1 of 2
Instructor: Ram Sewak Dubey ECON 317: Problem Set 3 October 11, 2017
3. [Market Equilibrium III]
Supply and demand functions could take non-linear form. In this question we examine
such cases again to find the equilibrium price and quantity.
(a) Demand
P+Q
2 +3Q−20 = 0,
and supply
P−3Q
2 +10Q = 5.
(b) Demand
3P+Q
2 +5Q−102 = 0,
and supply
P−Q
2 +3Q+71 = 0.
4. [National Income I]
Given
Y = C +I +G+NX,C = C0 +bY,I = I0,G = G0, and NX = NX0,
where C0 = 135, b = 0.8, I0 = 75 and G0 = 30, find the equilibrium national income and
the aggregate household consumption C in equilibrium.
5. [National Income II]
Given
Y = C +I +G+NX,C = C0 +bYd,I = I0,G = G0, and NX = NX0,
where
Yd = Y −T, and T = T0 +tY
and C0 = 85, b = 0.75, I0 = 30 and G = NX = 0, T0 = 20 and t = 0.20. Here T is
the total amount of taxes the households have to pay with T0 being the fixed amount of
taxes (regardless of income) and t is the tax rate (as a fraction of income Y). Find the
equilibrium national income, the aggregate household consumption C in equilibrium and
the total amount of taxes paid by the households..
Submission deadline: October 18, 2017 in class Page 2 of 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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