Microeconomics 100A
Problem Set 1
Due September 29, 2010 (Solutions Posted October 1, 2010)
Professor Michael Noel
University of California San Diego
1.
Imagine the demand function for oranges for consumer i is given by Q
i
d
= 100 – 10p
0
+ 2p
G
+ 4p
A
. +
Y
i
. The current price of oranges, p
0
, is 1. The current price of a bag of grapes p
G
is 1, the current price
of an apple p
A
is 1. Income is currently 20.
a.
How much is quantity demanded for consumer i at current prices?
b.
Calculate the (2D) inverse demand curve for oranges, i.e. p
0
as a function of Q
i
d
, holding all
other prices and income equal to their current values.
Draw this in a 2D diagram with Q on
the horizontal axis and p
0
on the vertical. What is the slope of the inverse demand curve?
c.
Write down the (2D) demand curve Q as a function only of p
G
, holding all other prices and
income equal to their current values. Draw this as an inverse demand curve with Q on the
horizontal and p
G
on the vertical, holding other prices and income fixed at current values.
What is the slope of this inverse demand curve?
d.
Write down the (2D) demand curve Q as a function only of p
A
, holding other prices and
income fixed at current values.
.
Draw this inverse demand curve with Q on the horizontal and
p
A
on the vertical. What is the slope of this inverse demand curve?
e.
Write down the (2D) demand curve Q as a function only of Y, holding all prices and fixed at
current values.
.
Economists like to call this an “Engel curve”. Draw this Engle curve with Q
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 Fall '08
 staff
 Microeconomics, Supply And Demand, inverse demand curve, QID

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