Question 1

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 income...

Question 2

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 what...

Question 3

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 what...

Question 4

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 in...

Question 5

The government is exploring ways to increase revenues through taxation.You are an economic adviser to public policy makers,and they pose to you the following question: Should the government tax yachts or should it tax gasoline? Explain your answer using price elasticity of demand.

Accepted Answer

The answer of The government is exploring ways to increase...

Question 6

Macroeconomists often say,"The reason we have inflation is that everyone expects inflation." Using the supply and demand model,show what happens to price when both consumers and producers expect the price of a particular good to increase in the future.

Accepted Answer

The answer of Macroeconomists often say,"The reason we have inflation...

Question 7

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 8

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 what...

Question 9

For each of the following situations,explain whether the demand for Gatorade would become more elastic or less elastic and why.
a.Competitors introduce new brands of sports drinks into the market.
b.A study finds that Gatorade consumption improves player performance.
c.Consumer-spending studies show that people spend a small proportion of their budgets on Gatorade.

Accepted Answer

The answer of For each of the following situations,explain whether...

Question 10

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 want...

Question 11

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 what...

Question 12

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 13

Answer the following questions about a market:
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:
a.If...

Question 14

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 15

You are given the following supply schedule:
  
a.Graph the information from the supply schedule.Be sure to label everything.
b.Now graph the following supply schedule:  
c.What happened to the supply curve?
d.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 16

At the farmers' 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?
c.Represent part b on a graph.

Accepted Answer

The answer of At the farmers' market in Irvine,California,the price...

Question 17

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 that 3.7 million...

Question 18

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?

Accepted Answer

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

Question 19

Please use the following supply and demand schedules to answer the questions below:
  
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 20

There is a competitive market for dog treats in Earltown.What would happen to the equilibrium price and quantity of dog treats if a study showing that treats improve your dog's behavior is published at the same time that two of the main dog-treat distributors shut down? Use a supply and demand graph in your analysis.

Accepted Answer

The answer of There is a competitive market for dog...

Quiz 3: The Market at Work: Supply and Demand

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 cigarettes when the government imposes a tax on their production.

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.

The government is exploring ways to increase revenues through taxation.You are an economic adviser to public policy makers,and they pose to you the following question: Should the government tax yachts or should it tax gasoline? Explain your answer using price elasticity of demand.

Macroeconomists often say,"The reason we have inflation is that everyone expects inflation." Using the supply and demand model,show what happens to price when both consumers and producers expect the price of a particular good to increase in the future.

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.

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.

Answer the following questions about a market: 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?

You are given the following supply schedule: a.Graph the information from the supply schedule.Be sure to label everything. b.Now graph the following supply schedule: c.What happened to the supply curve? d.List five things that could make the supply curve reflect your answer in part

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?

Please use the following supply and demand schedules to answer the questions below: 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?