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2. It requires one unit of land, one unit of labour, and one unit of other inputs in order to produce a unit of canola (c). The supply of land, labour, and other inputs are: Qiand = max{50, 50 + 0.2Plond} (5) QEhour =-400 + 40Pother and =-150 + 30Pother and the demand curve for canola is: QDola = 100 0.5Panota (a) Solve for the equilibrium price, quantity, producer surplus, and consumer surplus across all mAr- kets (land, Iabour, other inputs, and canola). (15 marks) (b) The government of Saskatchewan currently rebates the HST for most farm inputs (fertilizer, chemical, etc.). One reporter has argued that these "subsidies" could be eliminated Suppose that this tax rebate was taken away and other inputs were taxed at 30% (in actuality HST is not 30%, but this number keeps the math a bit clearer). Show how this tax impacts the the welfare of land owners, farm labour, producers of other inputs, and consumers. (15 marks). (Note that rounding can cause some issues here, since the policy changes are relatively small.) 2. It requires one unit of land, one unit of labour, and one unit of other inputs in order to produce a unit of canola (c). The supply of land, labour, and other inputs are: Qiand = max{50, 50 + 0.2Plond} (5) QEhour =-400 + 40Pother and =-150 + 30Pother and the demand curve for canola is: QDola = 100 0.5Panota (a) Solve for the equilibrium price, quantity, producer surplus, and consumer surplus across all mAr- kets (land, Iabour, other inputs, and canola). (15 marks) (b) The government of Saskatchewan currently rebates the HST for most farm inputs (fertilizer, chemical, etc.). One reporter has argued that these "subsidies" could be eliminated Suppose that this tax rebate was taken away and other inputs were taxed at 30% (in actuality HST is not 30%, but this number keeps the math a bit clearer). Show how this tax impacts the the welfare of land owners, farm labour, producers of other inputs, and consumers. (15 marks). (Note that rounding can cause some issues here, since the policy changes are relatively small.)
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Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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