1)
Discuss how we use the combination of the budget constraint and indifference curves to construct a demand curve in a two-commodity world. Describe what the budget constraint represents, what the indifference curves represent, and what adjustments must be made to be able to form a demand curve. When utility/satisfaction is maximized, what conditions must hold, in terms of prices and marginal utilities?

2)
You are given the following demand and supply relationships:

Qd = 75 – 2Pc + Psb – 2Pcm + 0.1Y

Qs = 6 + Pc – Pf

Where:

Pc    is the price of coal

Pcm is a complement to such as a boiler, set = 20

Pf       is the price of factors of production, set = 5

Psb    is the price of a substitute to coal, such as natural gas, set = 3

Psm    is the price of similar products that coal producers could produce, set = 5

Y       is a measure of economic activity, like GDP, set = 100

Solve for the equilibrium price and quantity. Also, solve for the price elasticity of demand, price elasticity of supply, and the income elasticity of demand at the equilibrium. Show your work.

3)
We have discussed several factors that may cause a demand curve to shift. Two of these are the price of substitutes and the price of complements. Briefly explain how a change in these prices (one at a time) will affect the demand curve for natural gas. Also, provide an example of both a substitute and a complement for natural gas.

4)
To convert mass to energy units, you need
1. Emissions factors
2. Specific gravities
3. Calorific values

5)
The average efficiency for a coal-fired electricity generation plant is

1. 35%
2. 65%
3. 55%

6)
What is the largest energy-consuming sector globally

1. Industry
2. Residential
3. Transport

1) Discuss how we use the combination of the budget constraint and...