Homework #1, Econ
612, Prof. Hanson
 A set of people who want to
buy a certain product have these marginal values: 55,30,75,95,40,60,65,35,100,50,85,70,90,80,45.
Another set of people want to sell this same product and have these
marginal costs: 80,20,50,40,90,10,30,0,60,70.
Graph the supply and demand curves for this product and find the
intersecting quantity and price for this product.
 The demand by professors for
student research assistants is given by Q = (100P)/3 while
the demand by students to be research assistants is given by Q =
60P. In equilibrium how many research assistants are there and
which side pays the other how much?
 Describe the effect of each
of these changes on the price and quantity of the market for
janitors: a. The invention
of a $10 million robot, which can replace a janitor in cleaning
buildings. b. Better filters to
prevent dust from entering and circulating in buildings. c. Allowing
easier immigration of workers from Haiti.
d. An
increase in the average size of offices.
Each
morning the demand for donuts at the JC is given by Q = 20 –10 P, while
the supply is given by Q = 30P. P is the price in dollars and Q is
the number of donuts.
 What is the competitive
equilibrium quantity and price?
 What if a tax of $0.50 per donut
were imposed? a.
If the tax were paid by donut sellers, what would be the new demand
curve? By how much would the quantity and price change?
b. If the tax were paid by donut
buyers, what would be the new demand curve? By how much would the
quantity and price change?
 What if a law were passed
requiring donuts be sold for no less than some minimum price? a.
What is the price and quantity if the minimum price is $0.25? b.
What is the price and quantity if the minimum price is $1.00?

Here is the supply and demand for movies in Fairfax and
Arlington.

Fairfax


Arlington


Price

Q Demand

Q Supply

Q Demand

Q Supply

1

9

1

14

10

2

8

2

12

12

3

7

3

10

14

4

6

4

8

16

5

5

5

6

18

6

4

6

4

20

7

3

7

2

22

a.
Find the price and quantity
of movies in each city, assuming people in each city are only allowed to watch
movies in their city. b.
Find the price and quantity
of movies in each city, assuming people in each city are allowed to watch
movies in whatever city they choose.
c.
In this second case, what
quantity of people travel from one city to the other to watch movies?
Which city do they travel to?