WESTGA ECON2106 Unit 2 Problem Assignment

Principles of Microeconomics XLS Group E0 Fall Semester 2020 CO -

Instructions

Grading Rubric: For full-credit, clearly write out each step of your calculations in sequential order and clearly mark your final answers. These questions have multiple parts (which also might include directions to illustrate changes on the graphs), so be sure to answer each. Partial-credit may be given, but only if all calculations are clearly shown.

Submission Instructions: Completed exercises must be submitted via Course Den Assignment Drop Box by established deadline. Completed work should be scanned and submitted as a PDF. (If this is not possible, then submit a typed document (saved as word doc or pdf) along with photos of any graphs or math calculations that cannot be typed into the document.

Unit 2 Assignment: You are given two sets of points associated with a supply curve: (Q1; P1) = (1; 2) and (Q2; P2) = (4; 3) and two sets of points associated with a demand curve: (Q3; P3) = (2; 5) and (Q4; P4) = (0; 7).

Questions to Answer:

1. Graph the supply and demand curves on the same graph.

2. A. Find the slope of the supply curve.

    B. Find the y-intercept of the supply curve.

    C. Find the linear equation of the supply curve.

3. A. Find the slope of the demand curve.

    B. Find the y-intercept of the demand curve.

    C. Find the linear equation of the demand curve.

4. What is the market equilibrium price and quantity?

New Information: Now suppose supply changes, such that the new points on the supply curve are: (Q1a;P1a) = (1; 3) and (Q2a; P2a) = (4; 4).

5. A. Find (and illustrate on your original graph from #1) the new equation of the supply curve. (This means you need to calculate the new slope and new y-intercept for the supply curve).

    B. Does this represent an increase or decrease in supply?

     C. Assume demand remains the same: what is the new market equilibrium price and quantity?