Transcript 1 Points - cloudfront.net

Problem Set #2
1) Trade papers with a partner
2) Use a red pen
3) Write your name in “Corrected By”
4) After grading each question, type their
score in a comment box on the digital
copy including explanations of missed
points AND write their score in the blank
rubric (hard copy)
EX: (5/5)
1. Key Concepts
5 Points Each
1a. Laws of Demand and Supply
5 Point Total
1 Points- Correct definition of Law of Demand
(Inverse relationship between price and
QUANTITY demanded)
1 Points- Example of Law of Demand
1 Points- Correct definition of Law of Supply
(Direct relationship between price and
QUANTITY supplied)
1 Points- Example of Law of Supply
1 Points- Clarity of examples
1b. Laws of Dim. Marg. Utility
5 Point Total
2 Points- Correct definition of the Law of
Diminishing Marginal Utility
(As you consume more of any good, the additional
satisfaction from each new unit will eventually
start to decrease)
2 Points- Example of the Law
1 Points- Clarity of example
1c. Normal and Inferior
5 Point Total
1 Points- Correct definition of normal good
(when income increased, demand increases)
1 Points- Example of normal good
1 Points- Correct definition of inferior good
(when income increased, demand decreases)
1 Points- Example of inferior good
1 Points- Clarity of examples
1d. Consumers and Producers Surplus
5 Point Total
1 Points- Correct definition of Consumers Surplus
(difference between the amount a buyer is willing
to pay and the price they do pay)
1 Points- Example of CS
1 Points- Correct definition of Producers Surplus
(difference between the price and the sellers
minimum price)
1 Points- Example of PS
1 Points- Clarity of examples
?
2a. S&D Worksheets
5 Points Total
2a. Demand and
Supply Study Guide
5 Point Total
Note sheet: Demand and Supply
5 points if completed entirely. NO blanks.
4 points if one graph or section blank
3 points if two sections blank
2 points if three sections blank
1 point if four sections blank
2b. Demand and Supply
Practice
15 Points Total
2b. Practice Sheet
1 Point Each (circle their mistake)
1. S decrease, P increase and Q decrease
2. D decrease, P decrease and Q decrease
3. S decrease, P increase and Q decrease
4. D increases, P increase and Q increase
5. D increase, P increase and Q increase
6. S decrease, P increase and Q decrease
7. D increase, P increase and Q increase
8. S increase, P decrease and Q increase
9. No shift, surplus, P increase, Qd dec. Qs inc.
10. S decrease, P increase and Q decrease
11.S increase, P decrease and Q increase
12. S increase, P decrease and Q increase
13. No shift, Ceiling below eq, P dec. Qd inc. Qs dec
14. S inc AND D inc, P Indeterminate and Q inc
3a. Government Intervention
8 POINTS TOTAL (we are only grading i and ii in class)
i.
1 point- price floor is the lowest legal price you can charge for a
product. It is used to help producers. Price floors leads to a
surplus because we see an inc. in QS and a dec. in QD
1 point for
correct graph
i. ii. 1 point- price ceiling is the highest legal price
you can charge for a product. It is used to help
consumers. Price ceilings leads to a shortage
because we see an inc. in QS and a dec. in QD
1 point for correct
graph
3b. 5 points total
4 points for correctly labeling (Pc), (Pp), (CR), and (PR)
1 point- Cigarette consumption is inelastic because
cigarettes are addicting, cheap, and don’t have a lot
of substitutes.
4b.
10 Points Total
4b.
10 Point Total (Graphs must be correctly labeled to earn point)
1 point- decrease/leftward shift in supply for
laptops (Must have Graph)
1 point- i. increased price for laptops
1 point-ii. decreased quantity (output) for laptops
1 point- iii. TR decreases for laptops
1 point- increase/rightward shift in demand for
desktops (Must have Graph)
1 point- iv. increasing price for desktops
1 point- v. increase quantity for desktops
1 point- decrease/leftward shift in demand for
DVD burners (Must have Graph)
1 point- vi. decrease in price for DVD burners
1 point- vii. decrease quantity for DVD burners
5a. Elasticity
• 5 points total
• 1.5 points-elastic goods: luxuries, lots of
substitutes, more expensive
• 1 point- elasticity: quantity is sensitive to a
change in price
• 1.5 points- inelastic goods: necessities, few
substitutes, cheaper
• 1 point- inelasticity: quantity is insensitive
to a change in price
5b. 5 points total
1 point: If the price for a good increases and the TR goes down,
the good has elastic demand. If the price for a good increases and
the TR goes up, the good has inelastic demand.
a. 3*10=30
b. 1*60=60
P TR =elastic
2 points: Correct
Graph (1 point
each)
2 points: showing
the math and
interpreting the
results to explain
elasticity. (1 point
each)
c. 5*10=50
d. 1*30=30
P TR = inelastic
Question #6:
10 Points Total
Question #6
a. 4 total- take one point off for each incorrect value in
chart (MU and MU/P)
Hats
Total Utility
MU
MU/P
Shirts
Total Utility
MU
MU/P
1
50
50
5
1
150
150
7.5
2
100
50
5
2
290
140
7
3
140
40
4
3
410
120
6
4
170
30
3
4
510
100
5
5
190
20
2
5
590
80
4
6
200
10
1
6
650
60
3
b. 3 Point Total
1 Points- First, calculate the marginal utility per
dollar spent
1 Points- Next, choose the good with the highest
MU/$ until you reach your income constraint of
$100
1 Points- 2 Hats and 4 Shirts
Question #6
c. 3 Point Total
1 Point- I would continue to purchase items that
provide me with the greatest amount of MU per
dollar spent.
2 Points- I would purchase 1 more hat and 1 more
shirt. (total of 3 Hats and 5 Shirts)