Q1. A television station is considering the sale of promotional DVDs. It can have the DVDs produced by one of two suppliers. Supplier A will charge the station a set-up fee of $1200 plus $2 for each DVD; supplier B has no set-up fee and will charge $4 per DVD. The station estimates its demand for the DVDs to be given by Q = 1,600 - 200P, where P is the price in dollars and Q is the number of DVDs. The price equation is P = 8 -Q/200.
Q2. If at an interest rate of 7 percent, planned investment is $2 trillion, government spending is $3 trillion, net taxes are $2.8 trillion, and household saving is $2.2 trillion, what is the quantity of funds demanded at an interest rate of 7 percent?