Problem Set 1: Mathematical Foundations for Economic Models

Using Tables and Graphs to Explain Economic Models (WLO 1.4) 1.? ?The table below contains typical economic data. It shows the quantity of a good that is demanded by purchasers and the quantity supplied by producers at various prices. Price Quantity Demanded Quantity Supplied $100 10 25 $80 20 20 $60 30 15 $40 40 10 $20 50 5 $0 60 0 a. At which price is quantity supplied equal to 10? b. At which price is quantity demanded equal to 10? c. At which price are quantities demanded and quantities supplied the same? (?Note: This is the equilibrium price.) d. At which price is the quantity demanded ?less than? the quantity supplied? (This represents a surplus.)? ? What is the size of the surplus? (That is, how much more is supplied than demanded?) e. At a price of $20 we see that the quantity demanded is ?greater than? the quantity supplied. This represents a ?shortage?. What is the size of the shortage? (That is, how much more is demanded than supplied?)

2. Refer to the graph below, which represents typical economic information about the amount of a product demanded and supplied at various prices.

a. At what price is quantity demanded equal to 2000? b. At what price is quantity demanded equal to zero? c. At what price is quantity supplied equal to 1400? d. What is the equilibrium quantity? (Where quantity demanded and quantity supplied are equal.) e. What is the equilibrium price? (Where quantity demanded and quantity supplied are equal.)

Problem Set 1: Mathematical Foundations for Economic Models

Using Equations to Explain Economic Models (WLO 1.4) 3. Text ch 3 Prob 1. The following function describes the demand condition for a company that makes caps featuring names of college and professional teams in a variety of sports. Q ? = 2,000 - 100?P where ?Q ? is cap sales and ?P ? is price. a. How many caps could be sold at $12 each? b. What should the price be in order for the company to sell 1,000 caps? c. At what price would cap sales equal zero?

4. Text ch 3 Prob 3. The following relations describe the supply and demand for posters. Demand: ?Q ? D ? = 65,000 - 10,000?P Supply: ?Q ? s ? = -35,000 + 15,000?P a. Use the equations to fill in Qs and Qd at the prices listed in the table. Price Qs Qd Surplus or Shortage $6.00 $5.00 $4.00 $3.00 $2.00 $1.00

b. Find the difference between Qs and Qd at each price. Indicate if it is a surplus, , a shortage, or neither. (Surplus if Qs is greater and shortage if Qd is greater.) c. What is the equilibrium price? (Where Qd = Qs)

Classify the following variables as nominal-level, ordinal-level, interval-level or ratio-level AND choose the best measure of central tendency (mean, median or mode) a.Temperatures inside 10 pizza ovens.What is the best measure of central tendency? b. Salaries of the coaches in the NFL, What is the best measure of cental tendency? c.Marital status of nurses in a hospital what is the best measure of central tendency? d. Ratings of textbooks (poor, fair, good, excellent) What is the best measure of central tendency?Identify a difference between central tendency error and leniency error. a. Central tendency error is a performance rating error, whereas leniency error is a selection error. Central tendency error occurs when assessors rate all workers as performing below expectations, whereas leniency error occurs when assessors rate all workers as performing above expectations. c. Central tendency error is also known as horns error, whereas leniency error is also known as halo CITOr. Central tendency error occurs when assessors rate all workers as average, whereas leniency error occurs when assessors rate all workers as performing particularly well.Question 10 Use the figure below to respond to the subsequent set of questions. 40 30 % of Students 20 10 0 F D C B A Grades Received EO 70 80 90 100 The second box-and-whisker plot is shifted to the right and less spread out (10% less). Lower extreme = 81, lower Q = 64,median = 74,upper Q = 85, upper extreme = 94 O 60 70 80 90 The second box-and-whisker plot is shifted to the right and less spread out (10% less). Lower extreme = 64,lower Q = 74,median = 81,upper Q = 85, upper extreme = 94 O 80 90 100 The second box-and-whisker plot is shifted to the right and more spread out (10% more). Lower extreme = 64,lower Q = 74,median = 81,upper Q = 85, upper extreme = 94 O 60 70 90 The second box-and-whisker plot is shifted to the right and less spread out (10% less). Lower extreme = 85,lower Q = 74,median = 81,upper Q = 64,upper extreme = 94 O 70 90 100 The second box-and-whisker plot is shifted to the right and more spread out (10% more)