1.         a) Calculate the following elasticity coefficient.  Interpret the coefficient fully.  Next,  graph this price and quantity combination using your...

1.         a) Calculate the following elasticity coefficient.  Interpret the coefficient fully.  Next,  graph this price and quantity combination using your own demand curve and using the appropriate technique find the elasticity segments and the marginal revenue.

P                Q_D

$90            9000

$110          7000

b)    Assume constant  total costs. Recommend a price change to maximize profits.  Explain using the elasticity concept.

2.    Using a graph, fully explain the importance of the market equilibrium by using         the consumer and producer surpluses.

i.                                                    3..     Using a graph, show and explain the impact of a tax on a commodity and  identify the impacts on consumers, producers, government, and society.  

4..    Using graphs and the areas approach show and explain the winners and losers for imposing a tariff on a product.  Include consumers, producers and society.  Using this analysis explain why we, as a society, tend to impose tariffs on products.

5.  Draw the average total cost, average variable cost, and marginal cost curves in one diagram and explain the following:  point of diminishing returns, maximum efficiency point of the variable input, and the maximum efficiency point of all inputs both fixed and variable.