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Unformatted text preview: College of Human Ecology Cornell University, Ithaca, New York Department of Policy Analysis and Management PAM 200 Intermediate Micro A. Sinan ¨ Un¨ur – Fall 2007 Quiz 2 – Answers The demand and supply curves in the market for wombats in Zambonia are given by: Q d = 40- P (1) Q s = 10 + P (2) where quantities are measured as lbs of wombats per week and the price is per lb of wombats. Use the equations ( 1 ) and ( 2 ) to answer the questions below. MC1: What is the highest price anyone is willing to pay for a lb of wombats? ( a ) 10 ( b ) 40 ( c ) 30 ( d ) 50 Answer : 1b . You can find the highest price anyone is willing to pay for a lb of wombats by setting Q d = 0: = 40- P and solving for P . MC2: What is the lowest price at which anyone is willing to sell a lb of wombats? ( a ) 40 ( b ) 30 ( c ) 10 ( d ) 50 Answer : I forgot to put the correct answer among the alternatives, so everyone gets a point for this one. Thanks go to Jack for spotting my error and letting me know immediately.for this one....
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- Fall '07
- Supply And Demand, wombats