Question

1. Using the following supply and demand schedules:

Price                                    Quantity Demanded                       Quantity Supplied

$2                                                        200                                                     50

$4                                                        150                                                     80

$6                                                        125                                                     100

$8                                                        110                                                     110

$10                                                     80                                                        135

1. Draw the market in a graph and indicate the point of equilibrium.
2. Show and explain the effect on this market of a price floor at $10
3. Show and explain the effect on this market of a price ceiling at $10

2. Assume the following production capabilities existed for each country using one week worth of labor:

Cars                                     Computers

                              USA                                      1,000                                   500

                              China                                   2,000                                   4,000

1. Draw each production possibilities frontier.
2. Does either country have absolute advantage? Explain.
3. Does either country have comparative advantage? Explain
4. Show a trade that benefits both countries, if one exists. Explain.

3. Explain, in your own words, the impact of changing our current federal tax code to a proportional tax for personal income from the current progressive tax we have currently. What you feel would be the impact on tax revenue, labor supply, etc. Explain in detail.

Please help (I prefer typing style)

Answer 1