HW2 Answers

HW2 Answers - Econ 1: Tang Fall Quarter 2007 Homework 2:...

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Econ 1: Tang Fall Quarter 2007 Due Wednesday October 17, at the beginning of class. Please write your name, PID, and section number/TA name on your homework. 1. Graph and shift the market or individual demand or supply curves accordingly. a) In the market for gasoline, the price of powerboats falls drastically. b) In the market for Tuna, the government releases a study revealing that eating Tuna reduces cholesterol. c) Jane likes butter or cream cheese on her bagels, and the price of butter rises. What happens to her demand curve for cream cheese and her demand curve for butter? d) In the market for salmon, the state of Alaska increases the number of commercial fishing licenses. e) In the market for funeral plots, the average age of the population rises. f) In the market for textbooks, publishing companies expect a federal regulation setting maximum textbook prices to be enacted in three months. Answer: a) shift D right. b) shift D right. c) cream cheese: shift D right butter: nothing. d) shift S right. e) shift D right. f) shift S right. 2. Graph the effect on equilibrium price and quantity in the market for oranges for each of the following changes (graph each one separately): a) A chemical routinely sprayed on orange orchards is found to cause cancer. b) The wages of farm workers increase. c) A new orange picking machine is invented.
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This note was uploaded on 04/13/2008 for the course ECON 1 taught by Professor Tang during the Spring '08 term at UCSD.

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HW2 Answers - Econ 1: Tang Fall Quarter 2007 Homework 2:...

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