Question 1

Suppose the price of a sweater is $15. Julia’s benefit from purchasing each additional sweater is
given in the table below. If Julia is behaving rationally, how many sweaters will she purchase?
Sweaters Marginal Benefit ($)
1st sweater 50
2nd sweater 35
3rd sweater 30
4th sweater 23
5th sweater 12
6th sweater 8

If Julia is behaving rationally, she will purchase 4 sweaters

Question 2

Refer to the above diagram. Identify Flow (1), Flow (2), Flow (3), and Flow (4) and then track the flow of
physical objects and money.

 Flow 1: Goods and services

 Flow 2: Spending and revenue
 Flow 3: Wages and rent
 Flow 4: Labor and capital
Question 3

A. Slopes in Graphs: Draw graphs with the given characteristics:

Y Y Y Y

X X X X
Positive Slope Negative Slope Positive Increasing Positive Decreasing
Y Y Y Slope Y Slope

X X X X
Negative Increasing Negative Zero Slope Infinite Slope
Slope Decreasing
Slope

B. Slopes in Linear Equations: Determine the slope of the following equations:

1. Y = 5X + 7 2. Y = 2X + 157.34

3. Y = X – 34 4. Y = 1

5. 6X – 12Y = 24 6. 100X + 50Y = 200

7. Y = X 8. X = 2

C. Slopes from Plotted Points: Determine the slope. Graph the line.
SLOPE IS NEGATIVE 2
X Y
1 10
2 8
3 6
4 4
5 2
6 0