Free-Response Question

1. Question

   Pablo Picasso died having painted only 1,000 paintings during his “Blue Period.”

   
   

   
   

   1. Draw a correctly labeled graph of the market for Picasso “Blue Period” paintings showing each of the following:

      
      

      1. the supply and demand curves for paintings

         
         
      
      

      2. the equilibrium price and quantity of paintings

         
         
      
      

      
      

      
      
   
   

   2. List the five principal factors that will lead to a change in the price of paintings in this market.

      
      
   
   

   3. Show the effect on price in your market for paintings if wealthy art collectors decide that it is essential to acquire Picasso “Blue Period” paintings for their collections. (5 points)

      
      
   
   

   Rubric for FRQ (5 points)

   1 point: A graph with “Price” on the vertical axis, “Quantity” on the horizontal axis, and a labeled, downward-sloping demand curve

   1 point: A vertical supply curve at a quantity of 1,000 and an equilibrium price labeled on the vertical axis at the height of the intersection of the supply and demand curves

   1 point: A list of the five principal factors that shift the demand curve: a change in the price of related goods, income, tastes, consumer expectations, and the number of consumers

   1 point: A new, labeled, and downward-sloping demand curve to the right of the original demand curve

   1 point: An increased price labeled on the vertical axis at the height of the intersection of the new demand curve and the initial supply curve