Two things happen: (1) The first-year enrollment has increased at UMN and (2) bakers found a new and better way of shelving the many ingredients used to make bagels.

The economy is experiencing growth. As a result, income has increased in the economy. Assume that bagels are a normal good.

A new health report shows that eating too many bagels may increase cholesterol levels since bagels are considered a high carbohydrate and a high fat food.  

The first seven questions are about the market for bagels. For each of the following situations, determine what happens to the equilibrium quantity (QBagels) and equilibrium price (PBagels) of bagels.

A new kind of consumption good, the “smidget” is invented in Econland. Suppose that the impact of the invention on the widget market is that the price Pwidget decreases while the quantity Qwidget remains unchanged. A possible explanation for why this happened is that widgets and smidgets are __________ and the supply curve for widgets is __________. (Fill in the blanks.)

For the next four questions (questions 20 – 23), assume demand is D1 (the demand curve on the LEFT) and the industry is in long-run equilibrium.

Sonya consumes soda and fish nuggets. In the graph below, you can find the graphical representation of Sonya’s indifference curves as well as three different budget constraints. It is your job to identify which budget constraint(s) to use in each question. Use this information to answer questions 35 – 38.

The above graph illustrates the supply and demand for widgets in Econland, where instead Widgets can be obtained in world markets at a price PWorld = R as illustrated.  Suppose initially Econland is in autarky.  Then it opens to free trade with the rest of the world. Use this information to answer questions 11 – 15.

Name Willingness to pay Kiara 20 Elena 18 Maya 15 Isabella 13     The willingness to pay for fireworks in Econland is given in the table above. Assume the fireworks is non-rivalrous in consumption and non-excludable. It is socially efficient to have the fireworks if and only if the cost is no higher than

The long-run equilibrium price PLR is