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Solutions and Activities fer CHAPTER 2 THEORETICAL TOOLS OF PUBLIC FINANCE Questions and Problems 4. Ascume thatthe price of a bus trips $1, andthe price of a gallon of gas is $2.80. What is the relative price ofa gallon of gas In terme of Bus tripe? What happens wnen the price of 2 bus trip rises to 81.257 A commer conld exchange 2.5 us rips for 1 gallon of gas (bath wil cox $20), so the relative price ofa gallon of eas i 25 bus tps. At 1.25 per bus hip the elagive price of a gallon of osha dropped. 1082.50 + $1.25 ~2 businps 2, Draw the demand curve @ = 250 - 10P, Calculate the price elasticty of demand at prices of $5, $10, and $18 to show how it changes as you move along this inear demand curve, ‘One way to sketch linear demand fnetion (O=Owoen P= 82S, When P= 0. = to find the (Q) aay (P)inences Pave Soh =, 9 29-195) = 280-029 ‘inne Sto," 350" tau)= 1s ‘big Fess pon Picnic epee ine ua ey pace nee nice EERE poate cr erie tontiey ngl e naS Aa P ces om $00 a ‘esac Poneman aah e030, Seen ed are to 621, Of 0 6 Bees enya cn. cu he mtn fen et nef Sine ne ety chs ntemofyexane ee cnc eden reer soe fea 2 Yoptesto mepndon non tig, hep tsi aang teg | rap yore Delta atypmmeepehe ent eels, Epa fete ya eltaeegec ty Soceienieepecriecemens ‘ste op tone hes unt ming Sass pe age sana nn ‘ip ura cosa wae mo de ops ti foes ta ‘tm St cn un get akc a oe me ed gai ei Ack hf ge enone 9s mc ono emt i i dh, ‘ue year cpa pepe ere ayoveancataute, ‘Tetley al ce pc ny ey ce SSSA mpeg ster ‘ae Tm Coreen ete eee ar ed be ‘Shin shetng Gant no pon on ns eh fs {.eoninanaconumasmlenoes wie pare ation eae ansnee ‘Sige cena Sngpncocoeumevclaconeunl (acs cunoun be ae ‘ass mse ie cumening ae Uns tise cca ase ‘i tera ce set nya et pa Tee eb ltteer ttn oso posto niece ‘Sec ch nb i gy us eat eigenen iy pie Tomy mat ew oop Societe inns Gescrtwa ma caapee nn =semvmemnm uneven om we fintcin moe caneneotmre gree a cos nto) wausen one USC a speedos Osh ae Rec See oeaceeee eran rete So aa aoe oe Saree emooes, Seiatearetcainamneat See ae, Bocaeios inenems rene emetn rae i a a eta wy os 0309 se niente spose Seung rene goer mana ny my wo iy eth nla ae prin een ee ‘ag pitty een a ce ove cece ney ‘nls ss rons de wap or ae a ea ‘Behe en raeyfarcnesrtho nsneeveeS ‘ince temp ar i iy ka batebow pecs ‘Speier ay ne go Wo tn ree nc mone pee progam essen? te foe rece meer eet ea a ee eer ees ere (Set ct tect ti ee he cash me pt ‘mua nyoanco nrc cen ne ot wi a sos Satie ee eer Sanekeceaeeeecameeeioem Eee eae SoS = eae nats pgs inkl ce tinge et ed ‘tise coed Same pking upon ere estore is er a i cner ac ee Sn SELES Rennie es Cts tes tea od Eisen ne das cong ns ese {trocar ee tom hho operat rear ener ia viceneecerenaeeeesemateien Sheth ercemmevmeenmmises ‘The sine ee tt ete pe oars Sa Sta case eee See etree en, eeoaaaee a Advanced Questions ‘Moti3 3 carnedoyte wore ers wave ents waren ne ote on uence ctr drin ops ne roan Tei ot i ppd nis edit iene Th ‘gerSname ws aacloy oc oni SE te Sethi Lanrthy = reo Seba)“ aap te Wie Sena etintaha camel pean sumtin ict Setback aden or om foc yw ae eects eee eee etice ages Sweats a te Se eee eee ‘Ete cts hee sua ta she a near ewan dtoweren atte acne Se Ne omte {Sc Rimiy pone wr wate ba ne Ub rr ce gt ng tytn ene ot we fs vate ch =e ee nate coneuner sepa? Wate le pair ple? ipaget hanencemeecterenernirt mast iin ei pis P= f= en pees = 20) sg igs rte iy a en things hp ae oS There mse fe aul cuve bene =3P 2. Now orn none 5 ar ant ayo poaucn f Jossenecued atthe sehr enamanthesucermsioes ‘hia oneness pi ene Fob Soe kev eqaies “ea nts “oan at =p ng ntl =3636 In he ‘li Tues oy cme seeder ata oe ‘its ro omnipage ede ‘tlie elt aang ce go fal me me Sela acon beers net ttt terete Se appraise ade oewnatae eccane wo itm pine rhe he i a oe es ea eee eee ‘reuptake Th itt Soe teecerena nearer sueigem emanate ‘onsnon ene one ge te lame ae aes eee ee eres smite aoe Sotaaaiae ‘hound avs ene Beta pos non? ‘Sie ene tle es sos i lr se ent Staeyc om = 791 Wesel ware fee hs pty Sue here Fickle yn faite oie op Bcc ied ‘walt psi drone rst a neo ps nore isto, auppse aon Recon A= Pw Beshesatie wpeads © ache " Payee son Me ae eng ap sm A" 29-2 a ey in es Snes cena ome se sppeetnatn pce ype $5 Howl chang ourdecon? Reson aay nea eh nl gui 2-28 tin ty anges lag ate ite Tap a es ee i bs caters

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