Assign1key 10f

# Assign1key 10f - University of California Irvine Department...

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Unformatted text preview: University of California, Irvine Department of Economics Econ 20A: Basic Economics I Prof. Safarzadeh Student Name :________________ Assignment # 1 Student ID :___________________ I- In each problem below, you are to illustrate the market for textile with the appropriately shaped standard demand and supply curves. In each case, draw the shift in the demand and supply which result from the actions taken in the market or changes in related variables. Indicate in the space provided whether each variable and demand and supply will increase (+), decrease (-), remain unchanged (0), or have ambiguous sign (?). Please, number the curves so that the direction of each shift will be clear. Mark the original equilibrium by E 1 and the final equilibrium by E 2. Also, assume that none of the curves are perfectly inelastic or perfectly elastic i.e., the standard demand-supply model. Textile is assumed to be a normal good. 1. The economy is in recession and GDP is decreasing. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | | |____________________________ Q 2. The government levies new sales taxes on textile and collects it from the producers. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | | |____________________________ Q 3. Price of cotton (input in production of textile) is decreasing. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | | |____________________________ Q 4. GDP is rising and price of cotton in declining. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | | |____________________________ Q 5. GDP is rising and price of cotton is rising. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | |____________________________ Q 6. There is expectations of higher future prices for textile products. P | Demand :...... | Supply : ...... | Equilibrium Quantity :...... | Equilibrium Price : ...... | | |____________________________ Q II. Mark the best answer to the following questions. For multiple choice questions, please use ScanTron. 1. Which of the following is the best definition of economics? a. Economics is concerned with the welfare of people living in the economy b. Economics is concerned with GDP, inflation, and unemployment c. Economics is concerned with stock, bond, and capital markets d. Economics is concerned with allocation of limited resources among unlimited wants e. Economics is concerned with best distribution of income and wealth among people. 2. By economics definition, scarce resources are resources ____________ a. that are not available abundantly b. that are rare and exotic c. that we pay a price for them d. such as diamond, gold and oil 3. Which of the followings is considered capital in economics a. A \$20 bill in your pocket b. A \$1,000,000 saving of EZ corporation in the bank c. Stocks and bonds owned by individuals d. A calculator owned by a student e. All of the above 4. 4....
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Assign1key 10f - University of California Irvine Department...

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