Midterm1_v1_Fall2013_Solution

C an increase in the price of a complement d none of

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Unformatted text preview: S. e) At a price of $8, how large of a surplus will there be in this market? A surplus of 50 units since QD = 10 and QS = 60 Qs –QD = 50. Part II: Multiple Choice Problems (Worth 52%) Please select only one answer. 5. [4%] Refer to the figure below. The graphs show the demand for cigarettes. In the figure, the arrows are consistent with which of the following events? a. Tobacco and marijuana are complements, and the price of marijuana decreased. b. Tobacco is a “gateway drug,” and the price of marijuana increased. c. The price of cigarettes increased. d. The arrows are consistent with all of these events. 6. [4%] New cars are normal goods. What will happen t...
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This note was uploaded on 12/17/2013 for the course FILM & TV 106A taught by Professor Kuntz during the Fall '08 term at UCLA.

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