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Unformatted text preview: models). 3. What is an opportunity cost? Discuss how opportunity cost is used by economists in making policy recommendations (3 paragraphs hint: gains of trade) 4. What is the difference between change in demand and change in quantity demanded? Give factors that contribute to both demand and quantity demanded. 5. Consider the market for Pizza. Suppose that the market demand for pizza is given by the equation Q d = 300 - 20P d (or P d = 15 - Q d ) and market supply for pizza is given by Q s = 20P s 100, (or P s = 5 + Q s ), where Q d is quantity demanded and Q s is quantity supplied, P s is the price producers receive and P d is the price consumers pay for a pizza. (i) In equilibrium, how many pizzas would be sold, and at what price? (ii) What would happen if suppliers set the price at $15? Explain your answer....
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This note was uploaded on 04/15/2011 for the course ECON 1101 taught by Professor Rappoport during the Fall '08 term at Temple.
- Fall '08