Suppose Demand Is Given by Q^d = 400 - 15P

question 3

Multiple Choice

Suppose demand is given by Q^d = 400 - 15P + I, where Q^d is quantity demanded, P is price and I is income. Supply is given by Q^s = 5P, where Q^s is quantity supplied. When I = 200, equilibrium price is

• A) 15
• B) 20
• C) 25
• D) 30

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Definitions:

Without Recourse

This refers to a provision in an agreement that exempts the seller from liability or obligation to the buyer in case of some failure on the part of the products or services sold.

Negotiability

Refers to the feature of a financial instrument which allows it to be transferred from one party to another in a legal manner, typically without endorsement or delivery.

Blank Indorsement

A signature by the holder on the back of a negotiable instrument, such as a check, without specifying a particular endorsee, thereby making the instrument payable to the bearer.

Qualified Indorsement

An indorsement on a negotiable instrument in which the indorser disclaims any contract liability on the instrument; the notation “without recourse” is commonly used to create a qualified indorsement.