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1
METU
Department of Economics
Econ 101 Introduction to Economics I
All sections
20092010 Fall Semester
PROBLEM SET # 1 (With Answers)
(APPENDIX of CHAPTER 1 )
PART A: SHORT QUESTIONS
1.
(1) z = a + by
(2) z = a – by
where y and z are variables; a and b are constants . For the equations above;
a.
Define the dependent variables:
Dependent variable is ‘z’ for both (1) and (2)
b.
Define the independent variables:
Independent variable is ‘y’ for both (1) and
(2)
c.
Show the intercept and slope terms and interpret them:
For (1): a is the intercept term. This means that when y is 0, z is a.
b is the slope term. This means that for every one unit increase in y, there is
b unit increase in z .
For (2): a is the intercept term. This means that when y is 0, z is a.
b is the slope term. This means that for every one unit increase in y, there is
b unit decrease in z .
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2.
For each of the following equations, graph the line and calculate its slope.
a.
P = 10 – 2 q
D
( Put q
D
on the Xaxis)
b.
P = 100 – 4 q
D
( Put q
D
on the Xaxis)
c.
P = 50 + 6 q
S
( Put q
S
on the Xaxis)
d.
I = 10,000 – 500 r ( Put I on the Xaxis)
Slope = 2
Slope = 4
Slope = +6
Slope =  0.002
3.
Write the equations of the linear functions whose graph
a.
has slope 2 and intercept (0, 3)
y = 3 + 2x
b.
has slope 3 and intercept (0, 0)
y = – 3x
c.
has slope 4 and passes through the point (1, 1)
y = 3 + 4x
d.
has slope 2 and passes through the point (2, 2)
y =
2 – 2x
e.
passes through the points (2, 3) and (4, 5)
y = x + 1
5
q
D
25
q
D
5
10
q
s
10.000 I
P
P
P
r
100
110
10
80
20
50
3
4.
For each of the graphs in the figure below, say whether the curve has a positive
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This note was uploaded on 01/05/2012 for the course ECON 101 taught by Professor Gulipektunc during the Spring '11 term at Middle East Technical University.
 Spring '11
 gulipektunc
 Economics, Microeconomics

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