quiz2 - Econ 1 M10 Quiz 2 Name_ Perm_ 1. Suppose the market...

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Econ 1 M10 Quiz 2 Name_________________________ Perm____________________ 1. Suppose the market for Campbell’s Soup (which is an inferior good ) is initially in equilibrium. If a prolonged recession causes the average income of Americans to fall, what will happen to the equilibrium price and quantity of Campbell’s Soup? Price ________ (increases, decreases) Quantity ________ (increases, decreases) Use the following information to answer questions 2-3: Quantity Total Cost 0 $0 1 $2 2 $5 3 $10 2. Graph the Supply Curve using the information above: Supply Curve 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 Quantity (Q) Price (P) 3. What is Producer Surplus when P=$4? ________. Shade this area on your graph.
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Use the following information to answer questions 4-6. The market for widgets is described by the following equations: Demand: Q = 25 – P/4 Supply: Q = P 4. What are the equilibrium price and quantity? P = _______________
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quiz2 - Econ 1 M10 Quiz 2 Name_ Perm_ 1. Suppose the market...

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