Intro to Microeconomics – Quiz 1 – Supply and Demand.
Professor Festa 18/09/2007
This Quiz is due in class by Tues Sep 18th
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 with respect to price? (2 points)
2) Why do we normally assume that the supply curve slopes upwards? (1 point)
3) 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).
4) 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). (2.5 points).
5) 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). (2.5 points).