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econ hw #2 - Economic Sciences 101 Section 02 Spring...

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Economic Sciences 101 Section 02 Spring Semester 2011 Homework 2 Due February 10 @ 1:25 PM Name: Michael Reber Solutions to problems must be TYPED except for calculations and graphs. For full credit, graphs must be completely LABELED. Be sure to justify your answers clearly and precisely for full credit, even if question does not explicitly ask for justification. Questions must be answered in order for full credit. Give CITATIONS for help received to answer any of the following problems. A maximum score for this assignment is 25 points, though there are 27 points given. A hard copy (as opposed to an e-copy) is required. Homework must be stapled. 1) Consider the fo ll ow i ng : P = 40-16Q P = 2Q 2 a. Define competitive equilibrium and explain its economic relevance. ( 2 pts ) Competitive equilibrium is an economic situation of relative balance in which no buyer or seller can improve its trading position under the prevailing price and wage and supply situation. b. Calculate the competitive equilibrium explicitly. ( 2 pts ) 2)
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