micro_problem_set1

micro_problem_set1 - 4d) There would be a shortage in...

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1) The opportunity cost of buying the house will mean that she loses the 4% interest, $8,000, and the $3,000 annual cost. The total value comes out to $11,000. If she chooses to rent then she loses $12,000 per year. Buying the house is a good deal for the tenant because she will lose $11,000 per year as opposed to $12,000. 2)* 3a) 5 wristbands 3b) 6 wristbands 3c) Kristen 4a)* 2a) 1,500 pizzas each year. 2b) 30 ovens each year.
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4b) $4 4c) There would be a surplus in supply causing prices to decrease.
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Unformatted text preview: 4d) There would be a shortage in supply. People will be willing to pay more causing the prices to increase. 5a) P Q S D D1 The demand for hot dogs shifts to the left causing price and quantity to decrease. Q* Q*1 P* P*1 5b) *For the graphs: "Create a Graph." Nces.Ed.Gov . 10 Feb. 2008 <http://nces.ed.gov/nceskids/createagraph/default.aspx>. P Q D S Demand for hot dogs shift to the right causing price and quantity to increase. D1 Q* Q*1 P* P*1...
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This note was uploaded on 04/20/2008 for the course ECON 001 taught by Professor Knudson during the Spring '08 term at University of Iowa.

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micro_problem_set1 - 4d) There would be a shortage in...

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