This preview shows pages 1–2. Sign up to view the full content.
UNIVERSITY OF WISCONSIN
Economics 101 – Fall 2005
Wei Zhang
NOT TO BE TURNED IN
Problem Set 4
Finish before the October 3rd Midterm.
This problem set has been provided to help you prepare for Midterm 1. Answers are already posted. This
problem set will be neither collected nor graded. Please direct questions to your TA.
Supply and Demand and Market Equilibrium
1.
Finding Market Equilibrium.
Suppose that annual demand for widgets is given by the equation
Q
D
=404P while the supply curve is given by Q
S
=2P2.
a) At what price would the quantity demand be 0? At what price would the quantity supplied be 0?
b) Draw the supply and demand curves and label the equilibrium price and quantity.
c) Calculate the equilibrium price and quantity algebraically.
2.
Changes in Equilibrium due to Shifts in Supply and Demand.
To examine the market for Pentium
IV computers, draw a downward sloping demand curve and an upward sloping supply curve. Show the
equilibrium price and quantity in a clearly labeled diagram.
For each part below, draw a new supply and demand diagram showing the original equilibrium and the new
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview. Sign up
to
access the rest of the document.
This note was uploaded on 07/28/2010 for the course ECON 101 taught by Professor Hansen during the Fall '07 term at Wisconsin.
 Fall '07
 Hansen
 Economics, Microeconomics

Click to edit the document details