Answer the following questions:

Chapter 3:

Questions 1. Describe the major source of income and expenditure for households

Question 10. (Tax rate) Suppose taxes are related to income as follows:

Income Taxes

$1,000 200

$2,000 350

$3,000 450

1. What percentage of income is paid in taxes at each year?
2. Is the tax rate progressive, proportional, or regressive?
3. What is the marginal tax rate on the first $1,000 of income? The second $1,000? The third $ 1,000?

Chapter 4:

Questions 2. Identify five things which could shift a demand curve to the right or left

Questions 3. Explain why a supply curve usually slopes upward

Questions 4. Identify five things which could shift a supply curve to the right or left

Questions 12. (Equilibrium) Assume the market for corn is depicted as in the table that appears below:

1. Complete the table
2. What market pressure occurs when quantity demanded exceeds quantity supplied? Explain
3. What market pressure occurs when quantity supplied exceeds quantity demanded? Explain
4. What is the equilibrium price?
5. What could change the equilibrium price?
6. At each price in the first column of the table below, how much is sold?

Price PerBushel Qty. Demanded Qty. Supplied Surplus/Shortage Will Price Rise of Fall?

$1.8 320 200 ___________ __________________

2.00 300 230 ___________ __________________

2.20 270 270 ___________ _____________________

2.40 230 300 ___________ __________________

2.60 200 330 ____________ __________________

2.80 180 350 ____________ ____________________