Cristina Santin

Student ID: 87867

1. In a competitive market, the market demand is QD = 60 - 6P and the
market supply is QS = 4P. A price ceiling of $3 will result in
a. A shortage of 18 units.
Qd = 60 6(3) = 42
Qs = 4(3) = 12
42 12 = 30

b. A shortage of 30 units.
c. A surplus of 30 units.
d. A surplus of 12 units.
e. neither a shortage nor a surplus.

2. In a competitive market, the market demand is QD = 60 - 6P and the

market supply is QS = 4P. The full economic price under a price ceiling
of $3 is
a. 6.
b. 7.
c. 8.

Qs = 12
12 = 60 6; 6 P = 60 12;
6P = 48; P = 8
FEP = $8

d. 9.

3. Explain the following statement: A change in price will not lead to a

leftward shift movement of the demand curve.
Explanation:
El cambio en una variable que no sea de precio es la que resultara
en un shift en la curva de la demanda. Un cambio en el precio
resultara en el movimiento a lo largo de una curva de demanda fija
que se le referira como una cambio en la cantidad demandada, que
no sera lo mismo que un cambio en demanda que sera el cambio
de otra variable que no es precio por lo que ah es que se produce
el shift.

4. Explain, which of the following pairs of goods are probably

complements:
A. Hamburger and ketchup.
B. Frozen yogurt and ice cream.
C. Steak and chicken.
D. An MBA and a professional certification (PMP, Green Belt, CPIM,
Explanation: La seleccin ms acertada sera el de la hamburguesa
y el ktchup. Si la gente deja de pedir hamburguesas ya que su
precio aumento, una comida que usualmente lleva ktchup, la
demanda de este bajara tambin por qu no lo estarn
consumiendo como antes.
5. Suppose the demand for X is given by Qxd = 100-2Px + 4Py + 10M +
2A, where Px represents the price of good X, Py is the price of good Y, M
is income and A is the amount of advertising on good X. Based on this
information, we know that good X is:
A.
B.
C.
D.

A substitute for good Y and a normal good.

A complement for good Y and an inferior good.
A complement for good Y and a normal good.
A substitute for good Y and an inferior good.

Explicacin: Si PY es positivo pues el precio de Y es ms alto, pues ms

alta la cantidad que tiene demanda de X, as que son sustitutos y si M es
positivo y aumenta la demanda para el good X, pues es un Normal Good.
6. Suppose the demand for X is given by Qx d = 100 - 2PX + 4PY + 10M
+ 2A, where PX represents the price of good X, PY is the price of good
Y, M is income and A is the amount of advertising on good X. If
advertising on good X increases by $10,000, then the demand for X will
decrease (increase) to 20,000.
2A = 2 * (10,000) = 20,000.

7. As additional firms enter an industry, the market supply curve

(explain)
A. shifts to the right.
B. shifts to the left.
C. remains the same.
D. none of the statements associated with this question are correct.
Explicacin: Mientras ms firmas entran, la oferta va a shift a la
derecha, por lo que el precio del producto va a bajar ya que muchas

van a ofrecer el producto (mas oferta), cancelando entonces lo que

se pudieran haber ganado. Esto se relaciona a un equilibrio longrun en el cual las firmas en un Mercado perfectamente competitivo
van a tener cero ganancias.

8. Assume that price elasticity of demand is -2 for a certain firm's

product. If the firm raises price, the firm's manager can expect total
revenue to:
Decrease (-2 es elstico, y un cambio en precio podra cambiar
drsticamente la ganancia)
9. The demand for good X has been estimated by Qx d = 12 - 3Px . What
is the arch own price elasticity when the price of product change from
$2 per unit to $1 per unit.
P1 = 2 P2 = 1
Q1 = 12 3(2) = 6
Q 2 = 12 3(1) = 9
E = %Q / %P = 50/-100 = -.05

10.
The own price elasticity of demand for apples is -1.2. If the price
of apples falls by 5 percent, what will happen to the quantity of apples
demanded?
La cantidad de manzanas demandada va a aumentar
un 6%
-1.2 = %Q/ 5%
%Qknow
= -1.2 the
x5=6
11.
If apples have an own price elasticity of -1.2 we
demand is (explain):
A. unitary.
B. indeterminate.
C. elastic.
D. inelastic

En el momento en el que el porcentaje de cambio de precio es menor

(5%) que el porcentaje de la cantidad demanda (6%), esto convierte la
demanda en una elstica.