Phil Martinez, Lane Community College
Assignment #2
(30 points)
1a. Plot the the data in the following table on a graph, with the
price on the Vertical axis
and quantity sold on the horizontal axis. (5 points)
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b. Which varaible is the independent variable and which is the dependent variable?c. Is this a direct (or positive) relationship or an inverse (or negative) relationship?
d. What is the slope between point A and point B?
e. What is the slope between point D and point E?
f. Interpret the economic meaning of the slope.
2. Graph each of the relationships listed below and state whether each is either a direct (or positive) or inverse (or negative) relationship. (5 points)
a. average temperature and the number of bathing suits soldb. inches of rainfall in a day (from 0 to 10) and the number of golfers on the golf course
c. the price of computers and the number of computers consumers are willing to buy
d. the number of inches of rainfall (form 0 to 100) and the output of lettuce
e. the amount of tuition and the number of students enrolled in a college
3. The data for the market for capuccino are shown below: (10 points)
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Quantity Supplied |
Quantity Demanded |
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a. Graph the Supply and Demand curves in the market for capuccino.b. What is the initial equilibrium price and quantity?
4. For each of the following situations redraw both the initial Supply and Demand curves from question #3 above. Illustrate how the following changes are properly represented including any new equilibria. Indicate whether there is a change in Demand or Supply. (10 points)
a. A revolutionary war breaks out in the major coffee producing region of Brazil disrupts supply.b. A new technology allows lower quality (and cheaper) coffee beans to be used to produce cappuccino.
c. In order to cash-in on the cappuccino craze Pepsi introduces a new cappuccino soft drink, Capo-Cola., which is artifically flavored and does not use coffee as an input.
d. The price of commercial cappuccino machines falls by 25%.
e. The government removes an import tax on coffee of 100%.
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