Intro to Microeconomics – Quiz 1 – Supply and Demand. (10 points)
This Quiz is due in class by Wed Feb 14th. Please put work on a separate piece of paper. Use graphs where necessary.
1) Please draw a supply and demand graph with price and quantity on the correct axis. Provide me with the common sense reason plus one additional economic argument as to why the demand curve slopes down and the supply curve slopes up with respect to price? (2 points)
2) Where will the equilibrium price be on the graph? Explain and show why that is the equilibrium point and not another point on the graph. (2 points).
3) Name 2 characteristics that will shift the demand curve. Then give an example for each and explain which way the demand curve will shift (draw the graph). (2 points).
4) Name 2 characteristics that will shift the supply curve. Then give an example for each and explain which way the supply curve will shift (draw the graph). (2 points).
5) Draw the market for Joe's Taco's and Burrito's. Now consider the following. A chief competitor of Joe's, Taco Bell, has recently run into trouble because their food was determined to contain Ecoli. State any shifts in supply or demand and show on your graph. What will happen to equilibrium Price and Quantity? (2 points).