microeconomic questions


1. The demand for steel ingots is given by the following: p=150-0.5*Q. The private marginal cost of steel producers is given by the following: MC=50+0.5Q. In addition, there is an external cost of steel production (E) to residents who live near the steel mill where E=Q. A Pigouvian tax of _______ on steel production will ensure the efficient outcome is achieved:Answer0, (b)$25, (c)$50, (d)$75, (e)$1002. Assume that the domestic demand for cars is given by Qd=14000-2P and the domestic supply of cars is given by Qs=P-1000. Further assume that the world price for cars is given by $6000. In the presence of international trade the price in the domestic market exchanged is ______ and consumer surplus is equal to ________Answer(a) 5,000; 1,000,000, (b) 5,000; 2,000,000, (c) 6000; 1,000,000, (d) 6000; 2,000,000, (e) None of the above. 3. Which of the following statements is true?AnswerA monopolist that practices perfect price discrimination results in a deadweight loss relative to a perfectly competitive market. A monopolist that practices perfect price discrimination will choose an output level where marginal revenue is equal to marginal cost to maximise profit.A monopolist practising perfect price discrimination will choose a level of output lower than that which occurs in a perfectly competitive market.For a monopolist practising perfect price discrimination, marginal revenue is less than price for every unit sold.All of the above are true. 4. Assume that the domestic demand for cars is given by Qd=14000-2P and the domestic supply of cars is given by Qs=P-1000. Further assume that the world price for cars is given by $6000. When international trade is possible, the change in total surplus is equal to ____ compared to the situation when there is no trade:Answer0, (b) 1,500,000, (c) 3,000,000, (d) 13,500,000, (e) None of the above.5. The demand for steel ingots is given by the following: p=150-0.5*Q. The private marginal cost of steel producers is given by the following:...