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quiz1summer2007 - Economics 302 Summer 2007 Quiz#1 1 Name...

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Economics 302 Name _________________________________ Summer 2007 Quiz #1 Student ID Number ______________________ 1. This question is designed to evaluate your recall of basic supply and demand principles. For each of the following sketch a diagram of supply and demand. Assume each market is initially in equilibrium before the stated event occurs. Draw this initial equilibrium and the subsequent equilibrium after the market adjusts. Label your graphs with the following notation where appropriate: D 1 = the initial demand curve D 2 = the new demand curve S 1 = the initial supply curve S 2 = the new supply curve P 1 = the initial equilibrium price P 2 = the new equilibrium price Q 1 = the initial equilibrium quantity Q 2 = the new equilibrium quantity a. (.25 points) Firms decide to hire more workers at every given wage (the price in the labor market). b. (.25 points) Weather adversely affects firms’ ability to produce their product. c. (.25 points) The government subsidizes producers of the good with a fixed dollar subsidy per unit of the good supplied. On your graph label the price paid by
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