ASSUME THE FOLLOWING

57. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014 57. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014

57.

Assume the following: An individual consumer’s demand for tea Q

d

t

= 1,800 – 40P

t

+ 0.5I + 150P

c

Seller’s supply of tea Q

s

t

= –516 + 350P

t

– 120W Legend and Initial Values Assumed Values Q

d

t

Quantity of tea P

t

Price of tea per 100 grams I Household income £2,400 W Hourly wage rate for labor P

c

Price of coffee per 100 grams £22.4 Equilibrium price of tea £30.6 If the household income increases by 2.5% while Pc and W do not change, the new equilibrium quantity will be closest to: A. 5,163. B. 5,166. C. 5,136.

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