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Ch. 1 - ECN101 Intermediate Macroeconomics Professor...

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ECN101 Intermediate Macroeconomics Winter 2009 Professor E.A.Frenkel Homework 1 – Solutions (2). To better understand the role between exogenous and endogenous variables in a typical economic theory diagram, please draw four graphs that show the influence of each of the the following variables on the quantity of Baskin-Robbins Jamoca Almond Fudge ice cream flavor demanded in the United States (place quantity of ice cream demanded on the "X" axis): SOLUTION : for the following relations, we assume a simply linear demand curve . The price of this ice cream flavor. The average income of the consumer of this ice cream flavor. The average price of frozen yogurt (an ice cream substitute). Q ice cream Income Q ice cream P ice cream Q ice cream P yogurt
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