# home1 - EC 1 Section 1 UCLA Winter 2003 A Bresnock Homework...

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EC 1, Section 1 Student Name: UCLA TA Name/Section: Winter, 2003 A. Bresnock Homework Assignment 1 (15 points) In Eriador the demand for swords is P = 120 - 3 Qd, and the supply is P = 5 Qs, where P is the price (in guildings = an imaginary unit of currency) per sword, Qd is the quantity of swords demanded per year, and Qs the number of swords supplied per year (in millions). 1. (a) Graph the demand and supply functions for swords in the graph space below being careful to label all axes and relationships. (b) Offer a brief interpretation of the slope of the demand for swords equation? (c) Offer a brief interpretation of what the supply of swords equation indicates. (d) The equilibrium price of swords would be shown graphically at the intersection point of the supply and demand for swords. What is the equilibrium price of swords (in guildings)? What is the equilibrium quantity of swords produced (in millions)? Show your work numerical solution below and insert your answer into

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home1 - EC 1 Section 1 UCLA Winter 2003 A Bresnock Homework...

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