1. Suppose you have the information of a market, given the following functions: Quantity demanded = 140 - P (price) and Quantity supplied = P - 20.

It is requested:

a) Find the market equilibrium. b) Graph the market equilibrium. c) Find the consumer surplus.

2. Juan Prez has a market basket that contains 18 units of pants and 1 unit of staple foods; however, Juan wants more units of food and is willing to give up units of pants to get them. Don Juan wants to carry out this action in the following way:

A= 18 units of pants and 1 of food (initial basket) B= Will give up 7 units of pants to get 1 of food, and then. C= Will give up 5 units of pants to get 1 of food, and then. D= He will give up 2 units of pants to obtain 1 of food, and finally. E= will give up 1 unit of pants to get 1 of food.

It is requested:

a) Plot the slope of the indifference curve that measures the MRS (on the ordinate axis, plot the quantity of pants, and on the abscissa axis the quantities of staple foods).

b) Indicate the food units that Don Juan Prez has left in the final market basket.