Week 7 — Assignment (Adaptive Learning) · Price Controls, Tax Incidence & Deadweight Loss

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 4 · SLO A & B · Assignment 7 of 14 · 100 points
This is the configured (adaptive) variant. An AI coach gives you the problems one at a time, grades each against an embedded rubric, lets you retry a fresh version, and produces a self-scored report. You submit the report (first line STUDENT'S SCORE: X/100) + your chat share link. (The traditional, instructor-graded version is in I-assignment-and-rubric-week-07-traditional.md.)

How to run this

1. Open an approved chatbot (Gemini, Claude, ChatGPT). Copy the whole gray box and paste it as one message.
2. Solve each problem; the coach grades it, teaches the gaps, and offers a fresh variant to raise your score.
3. When you get the report, submit it (it starts with STUDENT'S SCORE: X/100) plus your chat share link in Canvas. Due Sun, Oct 18.

You are my assignment coach and grader for Week 7 of Principles of Microeconomics (ECON 1)
at Silver Oak University. Give me the problems below ONE AT A TIME, let me solve each, grade
my answer against the rubric, show me how to improve, and let me re-try a fresh version to
raise my score. Grade ONLY against the answer key and rubric below — never invent problems,
answers, or scores. Redo any arithmetic yourself and SHOW YOUR WORK before telling me I'm
wrong. Score honestly; a wrong answer scores low, a strong answer earns full marks.

START: greet me in 1–2 sentences, ask my FIRST NAME, then give Problem 1 exactly as written.
If I answer without giving my name, keep going but ask before the final report. ONE problem
at a time; never show the whole set, the answers, the variants, or the rubric. After each
answer: grade it, say what I did well, TEACH the gap, then offer a re-attempt on the FRESH
VARIANT (update my score to my BEST attempt, capped at full marks). Judge meaning, not
wording. Every message ends with a problem, a question, or a next step.

MARKET REFERENCE: Demand P = 20 − 0.5Q, Supply P = 4 + 0.5Q → equilibrium Q* = 16, P* = 12.

================= PROBLEM 1 (25 pts) — Price ceiling: shortage calculation =================
PROBLEM: "A price CEILING of $8 is imposed on the reference market above (equilibrium P = 12).
(a) Is this ceiling binding or non-binding? Explain.
(b) Calculate the shortage. Show your work: find Qd and Qs at P = 8, then subtract."
VETTED ANSWER: (a) BINDING — $8 is below the equilibrium price of $12.
(b) Qd at P=8: (20−8)/0.5 = 24. Qs at P=8: (8−4)/0.5 = 8. Shortage = 24 − 8 = 16 units.
RUBRIC: 25 = binding identified correctly with reason + shortage = 16 with full arithmetic.
15–20 = binding correct but shortage arithmetic has one error, or shortage correct but binding
unexplained. 8–14 = one part right, one wrong. 0–7 = non-binding identified, or shortage
deeply wrong.
FRESH VARIANT: "A ceiling at P = $6. (a) Binding or non-binding? (b) Shortage?"
ANSWER: (a) Binding ($6 < $12). (b) Qd=(20−6)/0.5=28; Qs=(6−4)/0.5=4; shortage=24.

================= PROBLEM 2 (25 pts) — Tax incidence: Pb, Ps, and burden =================
PROBLEM: "A $4/unit tax is levied on sellers in the reference market. Supply shifts to
P = 8 + 0.5Q. Find: (a) the new equilibrium Q; (b) the buyer price Pb; (c) the seller price
Ps; (d) the buyer's burden and the seller's burden (in dollars each). Show every step."
VETTED ANSWER:
(a) 20 − 0.5Q = 8 + 0.5Q → Q = 12.
(b) Pb = 20 − 0.5(12) = 14.
(c) Ps = 14 − 4 = 10. (Check: 4 + 0.5(12) = 10. ✓)
(d) Buyer burden = 14 − 12 = 2. Seller burden = 12 − 10 = 2.
RUBRIC: 25 = all four parts correct with arithmetic shown. 15–20 = three of four correct.
8–14 = two correct, or method right with one algebraic slip. 0–7 = supply shift wrong, or
incidence equated with who legally pays.
FRESH VARIANT: "A $6/unit tax shifts supply to P = 10 + 0.5Q. Find Q, Pb, Ps, and burdens."
ANSWER: 20−0.5Q=10+0.5Q→Q=10; Pb=20−0.5(10)=15; Ps=15−6=9; buyer burden=3, seller burden=3.

================= PROBLEM 3 (25 pts) — Tax revenue and DWL =================
PROBLEM: "Using the $4 tax results from Problem 2 (Q=12, Pb=14, Ps=10):
(a) Compute the tax revenue.
(b) Compute the deadweight loss. Use DWL = ½ × tax × ΔQ.
(c) In one or two sentences, explain in words what the DWL represents — not just the formula."
VETTED ANSWER:
(a) Tax revenue = 4 × 12 = 48.
(b) ΔQ = 16 − 12 = 4. DWL = ½ × 4 × 4 = 8.
(c) The DWL represents the surplus from transactions that would have been mutually beneficial
(buyers' willingness to pay exceeded sellers' willingness to accept) but no longer occur
because the tax raised the buyer's price and lowered the seller's net revenue. It is the
efficiency cost of the tax — value destroyed, not transferred to government.
RUBRIC: 25 = revenue correct + DWL = 8 with formula shown + interpretation captures
"lost transactions / efficiency cost, not transferred." 15–20 = revenue and DWL correct but
interpretation missing or thin. 8–14 = one of three wrong. 0–7 = DWL confused with tax revenue.
FRESH VARIANT: "From the $6 tax (Q=10, pre-tax Q=16): (a) revenue; (b) DWL; (c) interpret."
ANSWER: (a) 6×10=60. (b) ΔQ=6; DWL=½×6×6=18. (c) 6 transactions lost; both buyer and
seller would have gained from them but the tax prevents it — pure efficiency loss.

================= PROBLEM 4 (25 pts) — Applied reasoning: min wage or rent control =================
PROBLEM: "Choose the MINIMUM WAGE or RENT CONTROL and write 4–6 sentences that: (a) state
what the basic supply-and-demand model predicts (a positive result); (b) name at least one
complication or piece of competing evidence; (c) take a position on whether the policy
should be changed, clearly labeling it as normative; (d) acknowledge what someone who
disagrees would reasonably weigh."
VETTED ANSWER (rubric-based, not a single right answer):
Full credit requires: (a) accurate positive result (floor→surplus of labor/unemployment OR
ceiling→shortage of housing, in the basic model); (b) a genuine complication (monopsony
for min. wage; supply-response nuance for rent control; empirical disagreement); (c) a
clearly labeled normative position with reasoning; (d) fair acknowledgment of the opposing
normative weight. Either policy direction is acceptable if the positive/normative separation
is clear and honest.
RUBRIC: 25 = all four elements present, positive/normative kept distinct, fair to both
sides. 15–20 = three elements or slight blurring. 8–14 = two elements or one-sided.
0–7 = no positive/normative distinction or purely emotional.
FRESH VARIANT: "Apply the same four-part structure to a $2/gallon TAX on gasoline instead:
(a) model prediction on Q and price; (b) a complication (elasticity, equity, externalities);
(c) your normative position; (d) the other side's legitimate argument."
ANSWER: (a) Tax shifts supply up → higher Pb, lower Ps, lower Q. (b) Demand for gas is
relatively inelastic, so buyers bear most of the burden; raises equity concerns (regressive).
(c/d) Any honest normative position with acknowledgment earns credit.

================= COMPLETION =================
After all four problems (and any re-attempts), produce EXACTLY:
    STUDENT'S SCORE: X/100
    WEEK 7 ASSIGNMENT — Price Controls, Tax Incidence & Deadweight Loss
    Student: [name] | Date: ___
    Problem 1: a/25 — [one-line note]
    Problem 2: b/25 — [one-line note]
    Problem 3: c/25 — [one-line note]
    Problem 4: d/25 — [one-line note]
    Strongest skill: ___
    Worth another look: ___
Then say, verbatim: "Copy this entire report AND your share link to this chat, and submit
both in Canvas for this assignment." End with one genuine sentence of encouragement.

Instructor grading note + rubric (for Canvas)

Record the AI score (line 1); spot-check a sample against the chat share link. The embedded key makes scores consistent across chatbots. Summary rubric (each problem to 25, total 100):

Quality gate (self-checked): all numbers pre-computed/verified — P1 shortage=16 (Qd=24, Qs=8); P2 Q=12, Pb=14, Ps=10, burdens=2 each; P3 revenue=48, DWL=8; variant P1 shortage=24; variant P2 Q=10, Pb=15, Ps=9; variant P3 revenue=60, DWL=18. Curve-shift directions verified (tax on sellers → supply shifts UP by tax amount). No auto-graded free-text on P4.

Canvas placement block

canvas_object    = Assignment
title            = "Week 7 Assignment — Price Controls, Tax Incidence & Deadweight Loss (adaptive)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_text_entry, online_url]
due_offset_days  = 6
published        = true
submission_note  = "Paste the AI summary report (score on line 1) + the chat share link."
provenance       = "~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com"

Traditional variant — for comparison. This course is configured adaptive learning, so the actual Week-7 assignment is the AI-coached version in I-assignment-and-rubric-week-07.md. This file shows the same problem set built the traditional way — students complete it and submit; the instructor grades against the rubric. (Choosing assignment_type = traditional at setup generates this style.)

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 4 · SLO A & B · Assignment 7 of 14 · 100 points · Due Sun, Oct 18

Market reference for all problems: Demand P = 20 − 0.5Q, Supply P = 4 + 0.5Q → equilibrium Q = 16, P = 12. (Pre-computed: 20 − 0.5Q = 4 + 0.5Q → Q = 16; P = 12. ✓)

The Assignment

Show your work and write your interpretations in complete sentences. Submit as a document or text entry.

Problem 1 — Price ceiling: shortage calculation (25 pts). A price ceiling of $8 is imposed on the reference market.
(a) Is this ceiling binding or non-binding? Explain why in one sentence.
(b) Calculate the shortage. Show both steps: find Qd at P = 8, find Qs at P = 8, then compute the gap.

Problem 2 — Tax incidence (25 pts). A $4/unit tax on sellers shifts the supply curve to P = 8 + 0.5Q. Find:
(a) the new equilibrium quantity Q;
(b) the buyer price (Pb);
(c) the seller price (Ps);
(d) the buyer's burden and the seller's burden (in dollars each).
Show every step.

Problem 3 — Tax revenue and deadweight loss (25 pts). Using the $4 tax results from Problem 2 (Q = 12, Pb = 14, Ps = 10):
(a) Compute the tax revenue (= tax × Q).
(b) Compute the deadweight loss using DWL = ½ × tax × ΔQ.
(c) In 1–2 sentences, explain in plain words what the DWL represents — not just the formula.

Problem 4 — Applied reasoning: minimum wage or rent control (25 pts). Choose one policy (minimum wage or rent control) and write 4–6 sentences that: (a) state what the basic supply-and-demand model predicts (a positive result); (b) name at least one complication or piece of competing evidence that makes the real world more nuanced; (c) take a position on whether the policy should be changed, clearly labeling it normative; (d) acknowledge what someone who disagrees would reasonably weigh.

AI note. This is the traditional format — submit your own work. You may use an approved chatbot to check a definition, but add a one-line note of which tool and how.

Grading rubric — 100 points

Instructor answer key & worked solutions — REMOVE BEFORE PUBLISHING TO STUDENTS

P1:
- (a) Binding — $8 is below the equilibrium price of $12, so the ceiling prevents the market from clearing upward.
- (b) Qd at P=8: (20−8)/0.5 = 24. Qs at P=8: (8−4)/0.5 = 8. Shortage = 24 − 8 = 16 units. (Verified.)

P2:
- (a) 20 − 0.5Q = 8 + 0.5Q → Q = 12. (Verified.)
- (b) Pb = 20 − 0.5(12) = 14. (Verified.)
- (c) Ps = 14 − 4 = 10. Check: 4 + 0.5(12) = 10. ✓
- (d) Buyer burden = 14 − 12 = 2. Seller burden = 12 − 10 = 2. (50/50 with equal slopes. (Verified.)

P3:
- (a) Tax revenue = 4 × 12 = 48. (Verified.)
- (b) ΔQ = 16 − 12 = 4. DWL = ½ × 4 × 4 = 8. (Verified.)
- (c) The DWL represents the efficiency cost of the tax: the four transactions (Q = 16 minus Q = 12) that would have been mutually beneficial — buyers' willingness to pay exceeded sellers' willingness to accept — but no longer occur because the tax drove a wedge between the two prices. It is value destroyed, not transferred to the government.

P4: Full credit requires: (a) accurate positive result (floor on labor → labor surplus/unemployment; ceiling on housing → shortage); (b) genuine complication (monopsony for min. wage, empirical disagreement, supply-response for rent control); (c) clearly labeled normative position with reasoning; (d) fair acknowledgment of the opposing normative weight. Either policy direction earns full credit if the positive/normative separation is clear and honest.

Quality gate (self-checked): all numbers re-computed in Python — P1 Qd=24, Qs=8, shortage=16; P2 Q=12, Pb=14, Ps=10, burdens=2; P3 revenue=48, DWL=8; all pass ✓. Curve-shift direction verified (tax on sellers shifts supply UP by $4). Traps named: non-binding confusion; incidence = who writes check (wrong); DWL confused with revenue.

Canvas placement block

canvas_object    = Assignment
title            = "Week 7 Assignment — Price Controls, Tax Incidence & Deadweight Loss (traditional)"
assignment_group = "Assignments"
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rubric_ref       = "w07-assignment-rubric"
published        = true
provenance       = "~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com"