review_Q2.pdf

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Department
Economics
Course
ECON 101
Professor
Ratna Shrestha
Semester
Summer

Description
University of British Columbia Department of EconomicsPrinciples of MicroeconomicsReview Questions 2 Chapters 461 A technological breakthrough reduces the cost of producing computer chipsUsing supply and demand diagrams show the effect of this breakthrough on the equilibrium price and quantity in the following markets a the market for computers b the market for software2 Consider public policy aimed at smoking a Studies indicate that the price elasticity of cigarette demand is about 04If a pack of cigarette currently costs 3 and the government wants to reduce smoking by 20 by how much should it increase the price b If the government permanently increases the price of cigarettes will the policy have a larger effect on smoking one year from now or five years from now3 Explain why the following might be true A drought around the world raises the total revenue that farmers receive from the sales of grain but a drought only in Manitoba reduces the total revenue that Manitoba farmers receive4 A subsidy is opposite of taxa Show the effect of a 050cone subsidy on the demand curve for icecream cones the price paid by consumers price received by sellers and the quantity sold b Do consumers and producers gain or lose from this policy Ch 7 5The Canadian government administers two programs that affect the market for cigarettesMedia campaigns and labeling requirements are aimed at making the public aware of the dangers of smokingAt the same time Agriculture Canada imposes production quota on tobacco which is an input for cigarette production which raises the price of tobacco a How do these two programs affect cigarette consumption b What is the combined effect of these two programs on cigarette price
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