Homework2

# Principles of Microeconomics + DiscoverEcon code card

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UNIVERSITY OF CALIFORNIA SANTA BARBARA Economics 1 Francisco Azeredo Principles of Economics Ben Hansen Summer 2007 Session A Homework #2 I. Problems: Chapter 3 I.1 Book Problems Please place your answers in the space below. Take the time to draw the supply and  demand graphs necessary to explain your answer. Q1.  Q2. Q3. 1

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Q9. Graph: Q11. Graph: Q13. Graph: 2
Q15. Graph: I.2 Additional Problems Q1. You are given the following demand and supply schedule in the market of bowling  balls. Price Supplier 4 8 12 16 20 24 28 32 36 Price Demander 16 14 12 10 8 6 4 2 0 Quantity 0 1 2 3 4 5 6 7 8 a. Draw a graph of the supply and demand schedules. Indicate the equilibrium price  and quantity. 3

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b. At the equilibrium price, what is the economic surplus of the demander and  supplier for each quantity? Draw a graph showing the economic surplus of the  suppliers and demanders at the different quantities.

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Unformatted text preview: c. What is the total economic surplus of the supplier and demander at each quantity? What is the total economic surplus of the supplier and demander at the equilibrium quantity in part a)? d. What is quantity that gives the highest total economic surplus for the supplier and the demander? Is it greater, smaller, or equal to the equilibrium quantity? Explain. 4 e. Suppose the government imposes a price ceiling of \$8. What will be the quantity supplied? What will be the quantity demanded? Is there an excess supply? Is there an excess demand? Draw a figure showing the quantity supplied and demanded at the price ceiling of \$8. II. Problems: Chapter 4 II.1 Book Problems Q1. Q2. 5 Q7. Q8. 6 7...
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