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Unformatted text preview: Econ 211 Practice problems #2 (Comparative Statics) Patrick McLaughlin Practice Problems: These problems are to assist you in learning the material covered so far. They will not be collected. The answers are at the end, but I advise trying to do the problems without looking at the answers first. 1. Liability insurance (against hijackings) is an input in the production of Airline Travel. Ceteris paribus, an increase in the price of liability insurance will cause A. a downward shift of the marginal cost curve of Airline Travel B. an upward shift of the marginal cost curve of Airline Travel C. a decrease in the supply of Airline Travel D. an increase in the demand for Airline Travel E. both (b) and (c) 2. Arthritis drugs are typically used by older people (i.e. people over 60 years of age). Ceteris paribus, if the US population is expected to have 15 million more people over the age of 60 in 2010, compared to the present, what do you expect to happen to price and quantity, respectively, of arthritis drugs in 2010...
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This homework help was uploaded on 04/09/2008 for the course ECON 211 taught by Professor Johnson during the Spring '07 term at Clemson.
- Spring '07