Correctly illustrate the market (supply and demand curve). Make sure to correctly shade the area of the tax. a) Washington state has a salmon market which sells salmon at a price of P. At that price, Q lbs. of salmon will be consumed in one week. Elasticity of supply: relatively elastic Elasticity of demand: relatively inelastic In addition, suppose Washington state were to levy an excise tax collected by producers.

Suppose that a large city has dozens of apartment complexes that are nearly identical in terms of size, age, and amenities. Assume the demand curve for an apartments at an individual complex is perfectly elastic. If the city places an excise tax on apartments, who will pay the tax? What will happen to the quantity demanded. Explain and show graphically. For graphical purposes, assume the supply of apartments is upward sloping.

4-3  In each of the following instances, determine whether demand is elastic, inelastic, or unit-elastic. If price increases by 10 percent and quantity demanded decreases by 10 percent, demand is _______. If price decreases by 10 percent and quantity demanded increases by 5 percent, demand is _______.

The price elasticity of demand for beer among young adults (age 18 to 24) is about 1.30, and the number of highway deaths is roughly proportional to the group’s beer consumption. If a state imposes a beer tax that increases the price of beer by 20%, by how much will the number of highway deaths among young adults decrease?

A decrease in the price of oats went from $0.5 to $0.4 a pound, oat consumption increased from 64 tons to 80 tons a week in Oklahoma City and from 160 tons to 240 tons a week in Florence. The elasticity of demand is  a. Greater in Oklahoma City than Florence  b. Greater in Florence than Oklahoma City  c. Equal in Oklahoma City and Florence  d. Not enough info

INFO: Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. What is Julie’s elasticity of demand? _____ (Hint: only a number goes here) Is Julie's demand for envelopes elastic or inelastic? Explain your answer in a complete sentence(s) here:

Fully explain elasticity of supply and demand. After you've done that, give a few examples of products that are supply elastic, supply inelastic, demand elastic, and demand inelastic.

The demand for boxes of nails is estimated to be Q 185-10 p + 3 Y, Q2 where income is measured in thousands of dollars. If p = 5, and Y = 30, a. What is the income elasticity? Interpret and explain your result. What type of good is this? b. If the equation is then re-estimated using just dollars instead of thousands of dollars, what will be the effect on the coefficient for Y and the income elasticity? Explain your result. c. How would the income elasticity change if the price were increased to $9.50? Interpret and explain your result.

Suppose the price elasticity of demand for cigarettes is -0.7 and that the government can essentially set the price of cigarettes by altering the tax rate. If the government wishes to reduce the quantity of cigarettes demanded by 20 percent, how much must it raise the price of cigarettes? The government, to achieve its goal, must raise the price of cigarettes by percent. (Enter your response rounded to two decimal places)

1. Consider the market for Widgets. Suppose that the equation for the supply curve is: Qs = 1,000P – 10,000, and the equation for the demand curve is: Qa = 50,000 – 2,000P. It turns out that the equilibrium price is 20, while the equilibrium quantity is 10,000. a. Use a 10% increase in quantity to estimate (crudely) both the elasticity of supply and the elasticity of demand at the equilibrium quantity. i) Categorize supply and demand as elastic or inelastic at the equilibrium quantity. ii) Is supply or demand relatively more inelastic at the equilibrium quantity? b. If the government enacted a tax of $3, the loss in consumer surplus would be 9,000, while the loss in producer surplus would be 18,000 (see Homework 2, question #2.) Compare this information to your answer to part (a). Explain. c. Now estimate (crudely) the elasticity of demand at a quantity of 11,000 by decreasing quantity by 1,000. Compare your estimate of elasticity to the estimate in part (a). Comment.