intermediate economics

Intermediate Microeconomic Theory (ECON 021)

Homework 1

Answers must be as detailed as possible

1. Why not just use the slope of a demand curve to measure the sensitivity of quantity

demanded to a change in a commodity’s own price?

2. How does the quota set by Malaysia on foreign sugar imports of Q affect the total

Malaysian supply curve for sugar given the domestic supply curve, S d in panel a of the

graph, and the foreign supply curve, S f in panel b?

Cue: There are four things that can be done.

(a) Malaysia Domestic Supply (b) Foreign Supply

3. Briefly explain what causes changes in supply and demand? Your answer should clearly

state and explain the following:

a. 3 Economic factors that lead to a new supply curve

b. 4 non-economic factors that lead to a new supply curve