Question 1

Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.

Accepted Answer

The answer of Last year a very severe ice storm...

Question 2

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

Accepted Answer

The answer of Consumers can use either natural gas or...

Question 3

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. What is the equilibrium price and the equilibrium quantity in this market?
Suppose the current price is $2.00. What is the quantity of CD- Rs sold? Explain. Is there a shortage or a surplus? How big is it? Explain.

Accepted Answer

The answer of 
-Suppose the market for CD- Rs has...

Question 4

-The diagram above illustrates the market for apartments in Victoria, British Columbia.
a) If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is shortage or surplus?
b) What is the equilibrium rent and quantity of apartments?

Accepted Answer

The answer of 
-The diagram above illustrates the market for...

Question 5

-The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 6

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a CD burner increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of CD- Rs?

Accepted Answer

The answer of 
-Suppose the market for CD- Rs has...

Question 7

A relative price is the product of two money prices.

Accepted Answer

A relative price is the price of one good or service compared to another, usually expressed as a ratio, not the product of two money prices.

Question 8

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of CD- Rs?

Accepted Answer

The answer of 
-Suppose the market for CD- Rs has...

Question 9

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

Accepted Answer

The answer of The price of a computer is $1,000...

Question 10

The relative price of a good is greater than the money price of a good.

Accepted Answer

The relative price of a good refers to its price in terms of another good, essentially how much of one good you can exchange for another, while the money price is the price of a good in terms of currency. These are different concepts and cannot be directly compared as greater or lesser.

Question 11

In early 2007 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s) could have brought about the higher price?

Accepted Answer

The answer of In early 2007 the price of computer...

Question 12

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 13

If the equilibrium relative price for a two- liter bottle of Coca- Cola is $1.50 today, just like it was ten years ago, can we safely say that all supply and demand conditions in the market for Coke have remained very stable all these years?

Accepted Answer

The answer of If the equilibrium relative price for a...

Question 14

-The above table gives the demand and supply schedules for cat food. If the price is $1.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Question 15

During the real estate boom of the mid- 2000s, the prices of new and existing homes rose year after year yet people purchased more homes year after year. Can this outcome be explained as an exception to the law of demand?

Accepted Answer

The answer of During the real estate boom of the...

Question 16

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

Accepted Answer

The answer of Soft drinks and milk are substitutes for...

Question 17

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

Accepted Answer

The answer of 
-In the figure above, if the price...

Question 18

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

Accepted Answer

The answer of Computers are a complement to computer software....

Question 19

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

Accepted Answer

The answer of Soft drinks are a normal good. Draw...

Question 20

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?

Accepted Answer

The answer of 
-The above table gives the demand and...

Quiz 3: Demand and Supply

Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.

-The diagram above illustrates the market for apartments in Victoria, British Columbia. a) If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is shortage or surplus? b) What is the equilibrium rent and quantity of apartments?

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a CD burner increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of CD- Rs?

A relative price is the product of two money prices.

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a technological advance increases the quantity of disks supplied at each price by 25 million. What is the new equilibrium price and the new equilibrium quantity of CD- Rs?

The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?

The relative price of a good is greater than the money price of a good.

In early 2007 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s) could have brought about the higher price?

-The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?

If the equilibrium relative price for a two- liter bottle of Coca- Cola is $1.50 today, just like it was ten years ago, can we safely say that all supply and demand conditions in the market for Coke have remained very stable all these years?

During the real estate boom of the mid- 2000s, the prices of new and existing homes rose year after year yet people purchased more homes year after year. Can this outcome be explained as an exception to the law of demand?

Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.

-In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?

Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?

Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.

-The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?