Homework 1

Homework 1 - Homework 1 Book Questions: Chapter 1: 10, 11...

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Homework 1 Book Questions: Chapter 1: 10, 11 Chapter 2: 1, 3, 7, 8, 13, 19 Chapter 3: 1, 2, 5, 6, 9, 14, 15, 16 Additional Questions: 1. A. Suppose the demand curve for a particular good is given by P=4-3Q while our supply curve for this good is given by P=Q. What is the equilibrium price and quantity for this good? Why is this outcome the efficient one? B. The equilibrium price and quantity for the good will both be 1. This is efficient because it is where consumers will by the product and how much is demanded. C. Suppose that all of a sudden this good starts to go out of fashion? What would you expect to happen to the demand function? What will happen to the equilibrium price and quantity? D. If the good goes out of fashion, the demand curve will shift to the left which makes the equilibrium price decrease and the quantity to decrease as well. C. Suppose rather than the shift in demand suggested in part B., the price of an input used in production increases. What would you expect to happen to the supply function? What will happen to the equilibrium price and quantity in this case? D. If the price of a resource increases, you can expect the supply curve to shift to
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This note was uploaded on 04/07/2008 for the course COMM 180 taught by Professor Achinson during the Spring '05 term at UVA.

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Homework 1 - Homework 1 Book Questions: Chapter 1: 10, 11...

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