Premium Essay

Micro Economics Mcgill

In: Business and Management

Submitted By goncharov
Words 9007
Pages 37
SOLUTIONS TO ASSIGNMENT 1
TO
BUSINESS ECONOMICS: THEORY & PRACTICE
6TH EDITION, Canbek Publications

BUSINESS ECONOMICS
CEC2 532

Dr. Kenneth Matziorinis, CMC

Canbek Economic Consultants Inc.
Montreal, Québec
2012
© Canbek Publications

Problem 2.4
a)

Do

b)

D1

P

S

P

Do

S

D1
P1
P0

PO
P1
S

D1

Do

O

Qo Q1

S

Q

O

Market Price & Quantity Increase
c)
P

D1

D0

d)
P0

D0
S

D1
Q0

S

D1

P1

D0

Q1

Q

D0

P

P0

O

Q1 Qo

Market Price & Quantity Decrease

S

P1

D1

Q

O

Market Price & Quantity Decrease
e)

D1
Q1

Q0

Q

Market Price & Quantity Decrease
f)

P

D0

D1

S

P

P1

D1

S

P1

P0

D0

P0
S

O

D1

D0
Q0

Q1

Q

Market Price & Quantity Increase

D1
S

O

D0
Q0

Q1

Q

Market Price & Quantity Increase

Problem 2.4 (cont’d)
g)

h)
P

D

S0
S1

P0

P
P1
P0

P1
S0
O

S1

D
Q0

D

Q1

D
Q1

Q0

j)
D

P

S0
S1

P0

Q

Price Increases & Quantity Decreases

i)
P

S0

S0

0

Price Decreases & Quantity Increases

S1

S1

D

S0

P1
P0

P1
S0
O

D
Q0

Q1

Price Decreases & Quantity Increases

D
Q

O

Q1 Q0

Q

Price Increases & Quantity Decreases

Problem 2.5
P

D0

D1

S0
S1

P0

D1
S0

S1

0
a)

D0
Q0

Q1

Q

Quantity exchanged increases, the effect on price is indeterminate, given that we have no additional information at our disposal

P

D0

D1

S1
S0

P1

P0
D1
S1
0
b)

S0

D0
Q

Q

The equilibrium market price increases, the effect on the quantity exchanged is indeterminate, given that we were given no additional information

Problem 2.5 (cont’d)
P

D1

D0

S0
S1

P0

P1
D0
S0

S1

0
c)

D1
Q

Q

The...

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