problem set1 answers

 problem set1 answers Essay

Econ 95

Winter 2013

Problem collection 1

1 . Find the derivative with respect to x to get the following features. a. farrenheit ( x ) = ax 3 + bx 2 + x;

w.

f ( x ) = ax ln by;

2 . Precisely what is the price suppleness of the demand curve Q(p) = a - bln(p)?

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_

_

_

3. Suppose that the demand for water balloons fit the function D(p, ps) sama dengan D( l, ps ) =. two pв€’. 5 psв€’. 2 where p is the cost of drinking water balloons and ps is a price of super soakers (an advanced squirt weapon technology).

€ or a replacement for water

Based upon this require curve, happen to be super soakers a enhance balloons? Show why.

The partial offshoot of require with respect to the value of apply guns can be

For any positive price of water balloons and apply guns, this really is negative. So quantity of water balloons falls with a rise in the price of apply guns. Therefore squirt pistols are a enhance to normal water balloons.

1

4. Suppose that the current price of oil is $60 per clip or barrel and the amount sold is definitely 90 , 000, 000 barrels daily. Assume that the provision and require curves pertaining to oil happen to be linear. The present estimates from the price elasticity of source and demand in the U. S. are η sama dengan 1 and ε sama dengan -. two respectively. Imagine the supply and demand curves for oil are linear. In other words, supply can be expressed as S(p) = a + bp, and require as D(p) = at the – fp.

a. Get the intercept and incline of the source curve, a and w.

⌘=

dS 60 dS

90

;

=b=

= 1 ) 5;

dp 90 dp

60

s(60) = 90 = a + 1 . 5 ⇤ 60; a = zero.

b. Get the components of the demand contour, e and f.

вњЏ=

dD 62

=

dp 90

. two;

D(60) sama dengan 90 sama dengan e

dd

90 2

=f sama dengan

= zero. 3;

dp

60 15

. 3 ⇤ 60; at the = 108

Now imagine the U. S. federal government has chosen to purchase and additional 2 million barrels of oil daily and put this into the tactical petroleum reserve. In other words, this additional petrol is circulated into the floor and not circulated in the existing U. S i9000. oil market.

c. Bring (using source and...

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