San Beda University

COLLEGE OF ARTS AND SCIENCES

Department of Economics

MICROECONOMICS (MICROEC) PROF. CELEDONIO B. MENDOZA, JR.

ONLINE CLASS ASSIGNMENT #1.0 1st SEMESTER, AY 2020 - 2021

NAME of MEMBERS :
YEAR/SECTION :
RAW SCORE :
GRADE :

Technical Questions:

Assigned to Technical Questions

Group
Group 1 Consider the demand for computers. For each of the following, state the effect
on demand:
a. An increase in consumer incomes
b. An increase in the price of computers
c. A decrease in the price of Internet service providers
d. A decrease in the price of semiconductors
e. It is October, and consumers expect that computers will go on sale just
before Christmas
Group 2 Consider the supply of computers. For each of the following, state the effect on
supply:
a. A change in technology that lowers production costs
b. An increase in the price of semiconductors
c. A decrease in the price of computers
d. An increase in the wages of computer assembly workers
e. An increase in consumer incomes
Group 3 The demand curve is given by

a. Based on the demand curve above, is X a normal or an inferior good?

b. Based on the demand curve above, what is the relationship between
good X and good Y?
c. Based on the demand curve above, what is the relationship between
good X and good Z?
d. What is the equation of the demand curve if consumer incomes are
$30,000, the price of good Y is $10, and the price of good Z is $20?
e. Graph the demand curve that you found in (d), showing intercepts and
slope.
f. If the price of good X is $15, what is the quantity demanded? Show this
point on your demand curve.
g. Now suppose the price of good Y rises to $15. Graph the new demand
curve.
Group 4 The supply curve is given by

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“That in All Things, God May Be Glorified!”
 Assigned to Technical Questions
Group

a. Based on the supply curve above, what is the relationship between good
X and good Z?
b. What is the equation of the supply curve if input prices are $10 and the
price of Z is $20?
c. Graph the supply curve that you found in (b), showing intercepts and
slope.
d. What is the minimum price at which the firm will supply any of good X
at all?
e. If the price of good X is $25, what is the quantity supplied? Show this
point on your supply curve.
f. Now suppose the price of inputs falls to $5. Graph the new supply curve.
Group 5 Consider the market for Good X.
a. Suppose that consumers do not buy any of Good X at the price of $120,
and for every $10 decrease in price, the quantity consumed increases by
20. Write the equation for the demand curve of Good X.
b. Suppose that producers do not produce any of Good X at the price of
$50, and for every $10 increase in price, the producers increase the
quantity produced by 30. Write the equation for the supply curve of
Good X.
c. Find the equilibrium price and quantity.
d. At what price does this market have a shortage of 40? At what price
does this market have a surplus of 60?
Group 6 Consider the following markets, and draw representative supply and demand
curves.
a. What is the effect of bad weather on the equilibrium price and quantity
of coffee beans?
b. What is the effect of the change in the market for coffee beans on the
equilibrium price and quantity of coffee?
c. What is the effect of the change in the market for coffee on the
equilibrium price and quantity of a powdered non-dairy creamer?
d. What is the effect of the change in the market for coffee on the
equilibrium price and quantity of tea?
Group 7 Consider the market for hamburger, and draw representative supply and demand
curves.
a. Assume that hamburger is an inferior good. Suppose that consumer
incomes fall, and at the same time, an improvement in technology
lowers production costs. Show this on your graph. If you have no other
information, what can you say about the change in equilibrium price and
quantity?
b. Now suppose that you have the additional information that the change in
consumer incomes has been relatively small, while the reduction in
production costs has been relatively large. How would this change your
answer to (a)?

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“That in All Things, God May Be Glorified!”