Intro to Mathematical Economics.

Chapter 6. Comparative Statistics

Problem 1 Let's intreduee income, Y, in the simple market made]. We serume that the gnarl being said is normal andf then, the demand and supply,r equations are given by Q; =e rliPd +eY (mite:- } Q.=d+e. [ties-} {a} Find but the exprmsieas far the equilibrium price and quantity in this market? in terms of all other 1I.-'a1'iables {income in this ease} and parameters. Hear do these expmiens di'er from these in equation [-1]? [Keep in mind1 that e in this Ilereise is something tetallggr di'erent from r: in the class example1 cl in this exercise equals c in the clam example, and e in this exercise equals d in the class maple.) [b] 'What is the partial eeets of h in the equilibrium price and quantity? Can you rip them? Compare them to the expressions we get from the clam example without tax. {Again1 keep in mind, that r: in this exercise is something retail},T different from c in the class example, {i in this exercise equals r: in the class example, and e in this exercise equals d in the class example.) {It} What is the eec-t of c in the equilibrium price and quantity? Can yea sign them