Discussion section problem set 1 econ 200 Fall 2010

Discussion section problem set 1 econ 200 Fall 2010 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Set 1 Discussion Sections Economics 200 We will review Problem Set 1 in discussion sections beginning Wednesday, September 8. 1. Use supply and demand diagrams to explain what happens to the equilibrium price and the equilibrium quantity in the butter market in each of the following cases: (1) The price of margarine falls. (2) The price of bread falls. (3) Household incomes rise and butter is a normal good. (4) The New England Journal of Medicine publishes a widely cited report that says people who consume a great deal of butter are more likely to have heart attacks. (5) The price of milk butter makers use to produce butter rises. (6) The government places a 10 cent tax on each pound of butter produced. (7) The government offers a 10 cent subsidy on each pound of butter produced. In each case, discuss and explain you diagram carefully. 2. Suppose one of your friends offered the following argument: An increase in demand will cause an increase in price. The increase in price will
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/28/2012 for the course ECON 200 taught by Professor Vincent during the Fall '08 term at Maryland.

Page1 / 2

Discussion section problem set 1 econ 200 Fall 2010 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online