ECON 2005 Problem Set 2
Due Monday, February 27 by 23:59
1. Equilibrium: An economist collects data and estimates, (assume with perfect accuracy,)
the following supply and demand schedules for a market in the current year.
Price Quantity Supplied Quantity Demanded
$10 80 360
$20 90 300
$30 110 240
$40 140 210
$50 180 180
$60 230 150
$70 280 100
$80 300 60
$90 310 30
$100 310 0
•Sketch the supply and demand curves for this market in the current time period.
•What is the equilibrium price and quantity for this market?
•Suppose that, in the next year, the economist collects data and finds that the market
is still in equilibrium but at the equilibrium price of $60 and quantity of 230. The
economist concludes that there has likely been an increase in demand from the
previous year; why?
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