Econ 213

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Problem Set 1
Name: ______________________________________________

Problem Set 1 is due by 11:59 p.m. (ET) on Monday of Module/Week 2.

1. Based on the information provided below for the market for video games, answer the following questions:

PRICE | Q DEMANDED | Q SUPPLIED | $50 | 5 | 9 | $45 | 7 | 7 | $40 | 9 | 5 | $35 | 11 | 3 | $30 | 13 | 1 |

50[5]9
45[7]7
40[9]5
35[11]3
30[13]1

a) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph). S Pe D Qe (Qd=Qs) Pe,Qe(Qd=Qs) The market price clears 45 What is the equilibrium price and quantity? 45 7
PRICE: ______________________ QUANTITY: ______________________

Now, assume that a new government report claims that video game play stimulates the brain.

a.) What will this do to the demand curve? Of the list of things in the text that cause a change in demand, which best fits here as the cause of the demand shift? The demand curve will shift to the right of the graph due to interest on behalf of consumers.

b.) What will happen to the equilibrium price and quantity? The price will increase interest The quanity will raise
P: _______________________ Q: _______________________ 2.
Based on the information provided below for the state of Montana, answer the following questions:

CHOICE | OIL / barrels | WHEAT / bushels | A | 5000 | 0 | B | 4500 | 10000 | C | 2500 | 20000 | D | 0 | 25000 |

a.) Draw the Production Possibilities Curve.

b.) Determine the opportunity costs for a move from A to B; B to C; and C to D. (10000) wheat (500) oil (10000)wheat more 2000 oil (5000)wheat (2500)oil
A to B: _____________ B to C: __________________ C to D: _________________ 3.
In the…...

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