Transcript 1 Points - cloudfront.net

Problem Set #2
1) Trade papers with your partner
2) Use a red pen
3) Write your name in “Corrected
By”
4) After grading each question, write
their score in the blank. 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
i. 1 point- price floor leads to a surplus, inc. in QS and a dec. in QD
1 point for
correct graph
ii. 1 point- price ceiling leads to a shortage, inc. in QD and a dec. in QS
1 point for correct
graph
3Aiii
Hurst/Gax will grade
3Aiv
Hurst/Gax will grade
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.
4a. FRQ #1
10 Point Total
2point Drawing and labeling a supply and
demand graph with equilibrium price and
quantity
2point (a) Drawing and labeling a decrease
(leftward shift) in supply
2point (b) Drawing and labeling an increase
(rightward shift) in demand
2point (c.i) Price increases
2point (c.ii) Quantity is indeterminate
FRQ #2:
10 Points Total
10 Point Total
1point (A) Drawing and labeling an increase
(rightward shift) in supply.
1point Stating that price decreased and
quantity increased.
2point (B) Price Floor (line) drawn above
equilibrium
1point (B.i) Quantity demanded decreases
1point (B.ii) Quantity supplied increases
2point (B.iii) Consumers surplus decreases
1point (C.i) Price decreased after
1point (C.ii) Qd increased, Qs decreased
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
3 points- 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.
1 point for each
correct graph
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- You would purchase a combination of
items that provides you with the greatest
amount of MU per dollar spent.
1 Points- 2 hats
1 Points- 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.