Question 1

Draw a graph showing a:
a. positive change in demand.
b. negative (or adverse) change in supply.
c. positive change in quantity supplied.
d. negative (or adverse) change in quantity demanded.

Accepted Answer

The answer of Draw a graph showing a:
a. positive change...

Question 2

Compare and contrast the following sets of words:
a. normal good versus inferior good
b. substitute good versus complementary good
c. a supply curve versus a supply schedule
d. the law of demand versus the law of supply

Accepted Answer

The answer of Compare and contrast the following sets of...

Question 3

Use the accompanying graph to answer the following questions.
a. What is the equilibrium price and equilibrium quantity in this market?
b. Draw an increase in demand and explain what happens to the equilibrium price and equilibrium quantity.
c. This is a special type of supply curve that we call an inelastic supply curve. What special property does it have?

Accepted Answer

The answer of Use the accompanying graph to answer the...

Question 4

You are given the following supply schedule: $$\begin{array} { | l | l | } 
\hline \text { Price } & \text { Quantity Supplied } \
\hline \$ 0 & 0 \
\hline \$ 4 & 15 \
\hline \$ 5 & 30 \
\hline \$ 12 & 45 \
\hline \$ 16 & 60 \
\hline
\end{array}$$

a. What happened to the supply curve?
b. List five things that could make the supply curve reflect your answer in part

Accepted Answer

The answer of You are given the following supply schedule:...

Question 5

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

Accepted Answer

The answer of Without using a graph, explain the difference...

Question 6

In 1985, International Data Corp. (IDC) estimated that 3.7 million desktop computers had been sold at an average price of $1,054. In 2000, the number sold in the United States had risen to 132 million, with the average price decreasing to $700. The change in individuals' tastes and preferences has increased their demand for computers. Explain how the price of computers dropped over the 15-year period from 1985 to 2000.

Accepted Answer

The answer of In 1985, International Data Corp. (IDC) estimated...

Question 7

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for cigarettes when the government imposes a tax on their production.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 8

Using a supply and demand graph, show what happens to the equilibrium price and quantity for the following goods if, holding all else constant, income increases:
a. a normal good
b. an inferior good

Accepted Answer

The answer of Using a supply and demand graph, show...

Question 9

During the hot summer months, more people want lemonade because it is refreshing. Accordingly, more lemonade stands pop up during the summer months. What happens to the equilibrium price and equilibrium quantity in the lemonade market during the summer? Provide a short explanation and create a supply and demand model to illustrate your points.

Accepted Answer

The answer of During the hot summer months, more people...

Question 10

You are given the following equations where P is price and Q is quantity:
Equation 1: P = 300 - 10Q Equation 2: P = 5Q
a. Which equation represents the demand curve? Why?
b. What is the equilibrium price and equilibrium quantity?
c. At a price of $150, is there a shortage, surplus, or neither? If there is a shortage or surplus, what is the amount of that shortage or surplus?

Accepted Answer

The answer of You are given the following equations where...

Question 11

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bananas if, holding all else constant, a study comes out that says eating bananas causes cardiac problems.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 12

Answer the following questions about a market that is perfectly competitive:
a. If the price is above the equilibrium price, would there be a shortage or a surplus?
b. What will happen if the price is below the equilibrium price?
c. During a shortage, how does the market respond until it once again reaches equilibrium?

Accepted Answer

The answer of Answer the following questions about a market...

Question 13

Please use the following supply and demand schedules to answer the questions below: $$\begin{array} { | l | l | l | } 
\hline \text { Price } & \text { Quantity Demanded } & \text { Quantity Supplied } \
\hline \$ 0 & 25 & 0 \
\hline \$ 5 & 15 & 5 \
\hline \$ 10 & 10 & 10 \
\hline \$ 15 & 5 & 20 \
\hline \$ 20 & 0 & 30 \
\hline
\end{array}$$ 
a. At what prices will we see a shortage?
b. At what prices will we see a surplus?
c. What is the equilibrium price and quantity for this market?

Accepted Answer

The answer of Please use the following supply and demand...

Question 14

At the farmer's market in Irvine, California, the price of avocados is set at $3 each. At that price, 120 avocados are supplied but only 100 are purchased. Represent this on a supply and demand graph and answer the following questions:
a. Is there a shortage or surplus of avocados? How much is the shortage or surplus?
b. Without any government intervention, what will happen to the price and quantity of avocados?

Accepted Answer

The answer of At the farmer's market in Irvine, California,...

Question 15

You are given the following supply and demand equations: Q_D = 100 - 2P Q_S = 10 + P a. What will be the quantity demanded at a price of $40? b. What will be the quantity supplied at the price of $30? c. What is the equilibrium price and equilibrium quantity?

Accepted Answer

The answer of You are given the following supply and...

Question 16

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bagels if, holding all else constant, the price of cream cheese decreases.

Accepted Answer

The answer of Using a supply and demand model, show...

Question 17

You are given the following demand schedule: $$\begin{array} { | l | l | } 
\hline \text { Price } & \text { Quantity Demanded } \
\hline \$ 0 & 40 \
\hline \$ 3 & 30 \
\hline \$ 6 & 20 \
\hline \$ 9 & 10 \
\hline \$ 12 & 0 \
\hline
\end{array}$$ 
schedule. Be sure to label everything.

a. What happened to the demand curve?
b. List five things that could make the demand curve reflect your answer in part

Accepted Answer

The answer of You are given the following demand schedule:...

Question 18

Please use the accompanying graph to answer the questions.
a. What is the equilibrium price and equilibrium quantity?
b. At the price of $5, is there a shortage or a surplus? What is the amount of this shortage or surplus?
c. At the price of $15, is there a shortage or a surplus? What is the amount of this shortage or surplus?

Accepted Answer

The answer of Please use the accompanying graph to answer...

Question 19

After the invention of the cotton gin in 1793, shirt production became more efficient. If everything else remained constant and this production efficiency was the only change that affected the supply and demand for shirts, what would you expect to happen to the equilibrium price and equilibrium quantity? Use a supply and demand graph to supplement your explanation.

Accepted Answer

The answer of After the invention of the cotton gin...

Question 20

During a national recession, we see the income in the economy decreasing and the majority of stock prices decline (stock prices reflect the value of a company and are directly related to its profits). A few stock prices actually increase during a recessionary time. Using the information regarding supply and demand, explain why some stock prices rise during a recession.

Accepted Answer

The answer of During a national recession, we see the...

Quiz 3: The Market at Work: Supply and Demand

Draw a graph showing a: a. positive change in demand. b. negative (or adverse) change in supply. c. positive change in quantity supplied. d. negative (or adverse) change in quantity demanded.

Compare and contrast the following sets of words: a. normal good versus inferior good b. substitute good versus complementary good c. a supply curve versus a supply schedule d. the law of demand versus the law of supply

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for cigarettes when the government imposes a tax on their production.

Using a supply and demand graph, show what happens to the equilibrium price and quantity for the following goods if, holding all else constant, income increases: a. a normal good b. an inferior good

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bananas if, holding all else constant, a study comes out that says eating bananas causes cardiac problems.

You are given the following supply and demand equations: QD = 100 - 2P QS = 10 + P a. What will be the quantity demanded at a price of $40? b. What will be the quantity supplied at the price of $30? c. What is the equilibrium price and equilibrium quantity?

Using a supply and demand model, show what happens to the equilibrium price and equilibrium quantity in the market for bagels if, holding all else constant, the price of cream cheese decreases.

You are given the following supply and demand equations: Q_D = 100 - 2P Q_S = 10 + P a. What will be the quantity demanded at a price of $40? b. What will be the quantity supplied at the price of $30? c. What is the equilibrium price and equilibrium quantity?