Dr. Eric Dodge
533576189
Name_________
Intermediate Microeconomics: Quiz #1
This quiz is worth 15 points and you will have 15 minutes in which to complete it. You may use
a calculator and the back of this sheet for your responses. If something is unclear, please ask.
1. You are studying a model of a student’s grade in a college Intermediate Micro class. The
grade is believed to be a function of three variables that are listed below.
a. Which of the following are exogenous and which of the following are endogenous? Explain.
(4 points)
 The grade (G) earned in the class.
 The number of hours (H) studied for micro during the semester.
 The SAT math score (M) the student received in high school.
 The number of micro practice problems (PP) completed during the semester.
b. The student would like to receive the highest possible score on tomorrow’s exam. There are
only 10 possible hours the student can study, and there are three exams to study for: economics
(E), theology (T), and chemistry (C). How would you write out the constrained optimization
problem for this student? Think about what he/she is trying to maximize and what is his/her
constraint. (3 points)
2. The supply curve for wool is given by Qs = P where Qs is the quantity offered for sale with
the price is P. The demand curve for wool is given by Qd= 10 - P + I, where Qd is the quantity of
wool demanded when the price is P and the level of income is I. Income is an exogenous
variable.
a. If I=20, graph the supply and demand curves for this market. Solve for and indicate the
equilibrium price and quantity in the graph. Carefully label everything. (5 points)
b. If income rises to I=30, use comparative statics to find the specific impact of this change on
the price of wool and quantity of wool exchanged in the market. You do not need to adjust your
graph. (3 points)