Homework 1 1. In a simple model of supply and demand the equation for the demand curve is given by Q = 20 - 10P and the equation for the supply curve is given by Q = 5 + 5P. The solution of the model is: )Q=1; P=1 )Q=10; P=10 c) Q=10; P=1 d) Q=1; P=10 2. In the labor market model, an endogenous variable is a) the income tax rate b) the wage rate c) the number of labor unions d) the population 3. The difference between a parameter and an exogenous variable is that a) a parameter is fixed over time, while an exogenous variable is allowed to change over time. b) a parameter is allowed to change over time, while an exogenous variable is fixed over time. c) a parameter is changes in the model that happens randomly, while an exogenous variable is an output of the model. d) a parameter is an outcome of the model, while an exogenous variable is an input to the model. 4. The difference between an exogenous and an endogenous variable is that: a) an exogenous variable is an outcome of the model, while an endogenous variable is an input to the model. b) an exogenous variable is an input to the model, while an endogenous variable is an outcome of the model. C) an exogenous variable is fixed over time, while an endogenous varies over time. d) an exogenous variable is an input to the model, while an endogenous variable changes over time as determined by the model builder