‘Midterm Exam MM Professional ~ BINUS Business School Due Date: October 8th, 2015 ‘You are the manager oa 24-hour copy shop tats close on Sundays. Youlease a bung {or $2,000 por month and hie treo employees who each work lgh-hour shits at a wage of {$0.00 per hour. The markets for labor and ofce space are tight in your area To aqui the lease and hie workers, you sled contact requing youto ve 12 months advance notice bore abandoning your lease laying of werkers (you flo comply the contracts force ‘yout fly compensate you andar and workers forte income they thers would have ‘earned over te 12:mont pio) Pape costs you $02 per sheet, You currents $00,000 oor copies pe yor ata price o 6.10 per copy and 1,000,000 back-andwhte copies per year at price ofS. per copy. Because of your high volume, each of your to copes has a sof if feny one year. You jst recived call fom an employee who informs you that {your clo copier jus broke down. The good news is th your lack and-whie copiers ‘brand-new: head news is that anew olor cope wil ost $0,000. Should you purchase a ‘ne color cope? Assume tha customers who want colar copes are unig fo subse blac snc-white copes. ‘Suppose you se an ade to 3 U.S. Senator whos concerned about te ipo fa recenty ‘ropoaed excise taxon the wearer constant. You explained tothe Senator tat one ay of easing the impact on her constituents ito termine how tho taxchange afocts ‘ho evel of consumer surplus enjoyed bythe consituers, Based on your arguments, you are ‘even he go-ahead to conduct formal ena, and obtain the folowing estates of comand an supp Qf =500-5P gag O° =2P-60 «Graph the supply and demand curves What are the equlbrium quanty and equllbrum pce? «How much consumer surplus exis inthis market? 6. 1fa$2 excise taxis vied on this good, what wll happen fo the equi pce and vanity? 6, What with consumer surplus be afte the ax? “Te income ela of demand for your fs product eestimatad o be 0.75, A recent pent in The Wal Steet Joumalsays that national income is expected to delne by 3 percents year. 1[Page