Support2 - q = 9 & p (Demand) q = 1 + p (Supply) (in...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Support Class 2. 1. On the same graph, plot the following functions: (i) y=1+x; (ii) y=2+x; (iii) y=1+2x. Explain how the graphs of (ii) and (iii) di/er from the graph of (i). 2. On the same graph plot the following functions y = 1 + x y = 9 x: Solve mathematically for the point where these two functions intersect. y = 3 + x: On the same graph, plot this new line. Solve mathematically for the point of intersection between the functions y = 3 + x y = 9 x Suppose instead the second function shifts down so that y = 7 x: Solve math- ematically for the point of intersection between the functions y = 1 + x y = 7 x Explain how shifts in these functions a/ect the point of intersection. 3. On the same graph, plot the following functions
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: q = 9 & p (Demand) q = 1 + p (Supply) (in this case you may put q on the y-axis). The equilibirum price p & is the price where supply equals demand. Find the equilibrium price and the quantity traded. (a) Suppose supply increases to q = 3 + p: Find the equilibrium outcome assuming the demand curve described above. Draw a diagram which depicts your answer. (b) Suppose instead demand falls to q = 7 & p: Find the equilibrium outcome assuming the supply curve described above. Draw a diagram which depicts your answer. (c) Flip your diagrams in (a) and (b) so that p is now on the y-axis. Explain how market price adjusts to shifts in demand and supply. 1...
View Full Document

This note was uploaded on 12/31/2011 for the course ECON MR 102 taught by Professor Huyduong during the Winter '11 term at RMIT Vietnam.

Ask a homework question - tutors are online