1. The market for rental cars has two segments, business travelers and leisure travelers. The demand from business travelers is QB = 35 - 0.25P, and the demand from leisure travelers isQL = 120 - 1.5P. If the price of a rental car is $60, what is the consumer surplus in each market segment?

2. For demand Q = 1 - P, compute the consumer surplus function as a function of P.

3. A price-taking firm's supply curve is Qs = 10P. What is producer surplus for the firm if P = 20? By how much does producer surplus change if price increases to 21?

4. A market consists of 100 identical firms, each with total cost function C(Q) = 2Q^2. The market price is 200. What is an individual firm's producer surplus and what is producer surplus for the market?

5. Say demand is Qd = 1 - P and supply is Qs = P.(a) Find the equilibrium price and quantity if the market is unregulated.(b) Now say there is a price floor equal to .75. Now what is the quantity exchanged? What is the dead-weight loss of the price floor?(c) Now say there is a price ceiling equal to .25. Now what is the quantity exchanged? What is the dead-weight loss of the price ceiling?

6. The Screen Actors Guild, a union of actors, has some ability to impose minimum prices (a price floor) for work on regular Hollywood movies. If demand is Qd = 1 - P and supply is Qs = P,what price should the Screen Actors Guild set in order to maximize the total earnings of actors?

7. The market for fubbles is perfectly competitive. Supply and demand are neither perfectly elastic nor perfectly inelastic. The government imposes a price ceiling in this market, and it isbinding (the price ceiling is less than the market-clearing price). What happens to the quantity exchanged, consumer surplus, producer surplus, and total surplus as a result of the price ceiling?Just give the directions of the changes. If the direction of any of these changes is indeterminate,explain what determines the direction of the change.