The following formula, covered in class, may be helpful to you in answering one or more of thequestions.Forstraight-line demand and supply curvesof the form

Q =a +bP,

theelasticityat a particularpoint on the curve (withprice P and quantityQ) is given by:

Elasticity=b P/Q

Questions1 - 9

ForQuestions1-5: Themarket forlentils hasthe followingdemandand supplycurves:

QD=15-(3/200)PQS=3+(1/200)P

The units here are: P is in $/tonne (1,000 kg), Q is in millions of tonnes.Questions6-9 cover possible shocksto demand and/or supply.

Question1

Whatis the equilibrium lentil price?

Question2

Howmany lentils arepurchased in equilibrium?

Question3

Iftheprice were$400, therewould be(chooseone):

-Excess demand

-Excesssupply

-Neitherexcess demand nor excess supply

-Needmoreinformationto answer

Question4

Iftheprice were$400, therewould be(chooseone):

-Upwardspressureon theprice

-Downwardspressureontheprice

-Nopressure on the price

-Needmoreinformationto answer

Question5

Atthe equilibrium priceand quantity, what isthe elasticityofsupply of lentils?

Question6

A new highly credible and widely publicized epidemiological study finds substantial healthbenefitsfrom lentil consumption. The likely effect is(choose one):

-Anexpansion ofthe lentilsupplycurve

-Anexpansion of thelentildemand curve

-Anexpansion ofboththelentil supply anddemand curve

-A shift in neither curve

Question7

Avian flu reduces egg production.Lentils are an alternative source of protein to eggs, i.e.,lentilsandeggs aresubstitutes.The likelyeffect forthe marketfor lentilsis(choose one):

-Anexpansion ofthe lentilsupplycurve

-Anexpansion of thelentil demand curve

-Anexpansion of boththe lentil supply anddemand curve

-A shift in neither curve

Question8

Returning to the epidemiological study in question 6: The likely effect on the price of lentils is(chooseone):

-A big price decrease

-A small price decrease

-No price change

-A small price increase

-A big price increase

Question9

Returning to the epidemiological study in question 6: The likely effect on lentil consumption is(chooseone):

-Abig decreaseinlentil consumption

-Asmall decrease inlentil consumption

-Nochangeinlentil consumption

-Asmall increase inlentil consumption

-Abig increase inlentil consumption

Question10

Readthefollowing excerptfroman NPRnewsstory:

--start ofexcerpt --

WaltersSports Baris agleaming newpub justblocks fromthe largeststadium inWashington,

D.C. The decor is industrial chic exposed ducts and poured concrete floors and it'sspacious enough to accommodate the enormous throngs of elated fans who crowded in aftertheWashington Nationals' recent World Series win.

On a recent night, the bar was quieter. Still, customer after customer strode up to a stainlesssteel wall lined with beer taps to insert a card, touch a screen and pour a glass of self-servebeer.

Nowaitstaff. Nowaiting.

"This is my first time doing a beer wall!" says one patron, Chris Porcaro, over a yeasty IPA. "I'vebeento many sports bars, but never a beer-wall sports bar."

Theshinybeerwall allowscustomersto choosefrom23 differentvarietiesofbeeror"24ifyoucount Bud Light," says owner Jeremy Gifford.

--end of excerpt--

The primary effect of the development of the "pour-your-own technology" described is (selectone):

-Ashift in thesupply of labor

-Ashift in thedemand for labor

-Ashift inboth the supplyand demandof labor

-Noshift in eitherthe supply or demandof labor

Question11

Thelikely immediateeffect of thetechnological changein Question 10is to(select one):

--Increasewagesforhospitalityjobs

--Decreasewagesforhospitalityjobs

--Leavewagesforhospitalityjobsunchanged

Question12

Over the last 200 years, average wages have risen along with technological advance.The mainreasonthat this has occurred is (select one):

-Technologicaladvancehasmadeworkersmoreproductive,thereby contractinglaborsupply

-Technologicaladvancehasmadeworkers moreproductive,expandinglabor demand

-Technologicaladvancehas displacedworkers,thereby expandinglaborsupply

-Technologicaladvancehas allowedfirms toautomate, therebyreducing labordemand

Question13

Consider the market for tickets for a Feb 18 concert to be given by a popular musician.OnJanuary 3, tickets were available for purchase.However, ticket bots immediately purchased100% of the tickets.As such, the only market for tickets is the secondary resale market.(Ticketbotsdon't attend concerts, and purchase ticketssolely in order to later resell.)

OnJanuary4,themusicianannouncesthatFeb 18willbethefinalconcertof herperformingcareer.This makesattendingtheconference moreattractiveto prospectiveconcert-goers.

Themusician's announcement leadsto (select one):

-ashift in both demandand supply curves for theFeb 18 concert

-ashift in the demandcurve for tickets for theFeb 18 concert

-ashift in the supplycurvefor tickets for theFeb 18 concert

-ashiftinneithercurve

Question14

Denoting the price of tickets in the resale market by P, and the total number of attendees at theconcertby Q, the musician's announcement is likely to (select one):

-leaveP andQ unaffected

-increaseQ andleave P unaffected

-increaseP andleave Q unaffected

-increaseboth P and Q