2008ps1 - answer key

2008ps1 - answer key - BUAD 351 - Economic Analysis for...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
BUAD 351 - Economic Analysis for Business Decisions Homework 1 due: Wed 01/30/2008 PART (i): multiple choice Question 1 2 3 4 5 6 7 8 9 10 Answer c a d a b d c c a a I gave partial credit for (a) in question 3, but strictly speaking the assumptions need to be "rea- sonable," not realistic. Often fully realistic assumptions make for a model that is too complex to be of any practical use. Question 2 seemed to be another source of confusion. The statement is positive because it contains "is," and is therefore testable. Remember that positive statements are made regarding facts, while normative statements require value judgments and are thus inherently untestable/unrefutable. PART (ii): Supply and Demand The demand function for co±ee is given by Q d coffee = 10 2 P coffee + 5 I + 1 2 P tea : Let I = 4 and P tea = 8 : The supply curve is for co±ee is given by Q s coffee = 4 P coffee 16 : (a) write down the demand curve: The demand curve is Q d coffee = 10 2 P coffee + 5 ± 4 + 1 2 ± 8 = 34
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/23/2008 for the course BUAD 351 taught by Professor Eastin during the Spring '07 term at USC.

Page1 / 3

2008ps1 - answer key - BUAD 351 - Economic Analysis for...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online