Q1. Laura bought word -processing software in 2005 for$50. Laura's twin brother, Laurence, buys an upgrade of the same software in 2006 for $50 what problem in the construction of the CPI dose this situation best represent.
Q2. The market demand and supply function for VCR movie rentals are: QD= 10 - 0.04p and QS 3.8P = 4. Calculate the equilibrium quantity and price and point elasticity of demand in equilibrium. Next, calculate producer surplus. Suppose that VCR movie rentals are taxed at $ 0.25 per unit. Calculate the revenues generated by the tax. Calculate the loss in producer surplus. What percentage of the burden of the tax falls on producers?