ec-8 - E201 Spring 2009 Homework #3 One must learn by doing...

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E201 Spring 2009 Homework #3 One must learn by doing the thing; for though you think you know it, you have no certainty until you try. (Sophocles) After re -reading Chapter 4 in Mankiw, answer the following: 1. Explain why there is usually a direct relationship between quantity supplied and price. 2. List the shift variables of supply. 3. a. Show an increase in supply on a graph. b. Show a decrease in supply on a graph. 4. Using a separate graph for each, show the effects of the following on the supply of autos : a. Decrease in the price of steel b. Increase in wages of auto workers c. A foreign automaker enters the domestic market d. Government mandates that automakers install catalytic converters to reduce auto emissions 5. a. Draw a graph of a market for gasoline with an equilibrium price of $1.95 a gallon. Note: a market requires both a supply schedule and a demand schedule. b. On a separate graph for each, show the effects of each of the following on price and quantity exchanged: (1)
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This note was uploaded on 04/19/2011 for the course ECON 200 taught by Professor Staff during the Winter '09 term at Indiana.

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ec-8 - E201 Spring 2009 Homework #3 One must learn by doing...

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