Question 1

A free market can be described by the equations Q_d = 100 - P and Q_s = -20 + P. What are the equilibrium conditions in this market (that is, find equilibrium P and Q), and what are the maximum gains from trade in this market?

Accepted Answer

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Question 2

A free market can be described by the equations Q_d= 180 - 3P and Q_s = -50 + 2P. What are the equilibrium conditions in this market (i.e., find equilibrium P and Q) and what are the maximum gains from trade in this market?

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Question 3

Suppose the price of oil is falling due to a drop-off in demand after the summer driving season. Explain what a group of oil-producing nations (like OPEC) that control a significant amount of the world's oil supplies could do in order to keep prices (and hence profits) high.

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Question 4

A market can be described by the equations Q_d = 100 - P and Q_s = -20 + P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?

Accepted Answer

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Question 5

A market can be described by the equations Q_d = 300 - 4P and Q_s = 6P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus? Will this market return to equilibrium? Why or why not?

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Question 6

After the recent financial crisis, new rules and regulations regarding mortgage lending made it more difficult for many families to purchase a home. Draw a supply and demand graph illustrating the impact of these new, harsher, mortgage-lending laws on the rental housing market. Predict what will happen to the price of rental housing as a result of these new laws.

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Question 7

In the long run, will the market price for a good/service always equals the equilibrium price? Explain why or why not.

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Question 8

War in the Middle East tends to cause a decrease in the world supply of oil.

Accepted Answer

The Middle East is a major producer of oil, and when there is conflict or war in the region, it can disrupt oil production and transportation, leading to a decrease in the world supply of oil. This can cause oil prices to rise and impact global economic stability.

Question 9

Explain why an increase in demand for a good does not lead to an increase in supply. What does an increase in the demand for a good lead to?

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Question 10

A market can be described by the equations Q_d = 60 - 6P and Q_s = 4P. Calculate the equilibrium price and quantity in this market.

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Question 11

Consider the market for electric guitars, a normal good. Use well-labeled supply and demand diagrams to illustrate the effects of the following events on the market for electric guitars.
a. Consumer income increases.
b. The price of wood increases.
c. The price of electric amplifiers decreases.
d. There is a decrease in the price of bass guitars, a substitute for electric guitars.
e. The government eliminates taxes on the producers of electric guitars.
f. Many new electric guitar companies are started by an influx of immigrants.

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Question 12

Draw a market demand curve and market supply curve for automobiles and label these curves D₁ and S_1, respectively. (Be sure to label all axes!) On the same graph, show what would happen if the auto workers union required all manufacturers of automobiles to now provide health insurance for ALL workers and their dependents. (Note: Assume that prior to this change, manufacturers of automobiles do NOT provide health insurance coverage to 100 percent of their employees and/or their dependents.) What do you expect to happen to the price of automobiles as a result of this change in union policy?

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Question 13

A market can be described by the equations Q_d= 100 - P and Q_s = -20 + P. Calculate the equilibrium price and quantity in this market.

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Question 14

What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer.

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Question 15

The quantity demanded for wireless computer mouses is Q_d = 500 - 1.75P, and the quantity supplied is Q_s = 450 + 0.25P. a. Calculate the equilibrium price and quantity. b. Is total surplus maximized at 440 mouses? Explain. c. If the market price is currently $10, is there a shortage or surplus of mouses? How do you know? d. If the market price is $40, is there a shortage or surplus of mouses? How do you know?

Accepted Answer

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Question 16

A market can be described by the equations Q_d = 200 - 3P and Q_s = -50 + 2P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?

Accepted Answer

The answer of A market can be described by the...

Quiz 4: Equilibrium

A free market can be described by the equations Qd = 100 - P and Qs = -20 + P. What are the equilibrium conditions in this market (that is, find equilibrium P and Q), and what are the maximum gains from trade in this market?

A free market can be described by the equations Qd = 180 - 3P and Qs = -50 + 2P. What are the equilibrium conditions in this market (i.e., find equilibrium P and Q) and what are the maximum gains from trade in this market?

Suppose the price of oil is falling due to a drop-off in demand after the summer driving season. Explain what a group of oil-producing nations (like OPEC) that control a significant amount of the world's oil supplies could do in order to keep prices (and hence profits) high.

A market can be described by the equations Qd = 100 - P and Qs = -20 + P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?

A market can be described by the equations Qd = 300 - 4P and Qs = 6P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus? Will this market return to equilibrium? Why or why not?

In the long run, will the market price for a good/service always equals the equilibrium price? Explain why or why not.

War in the Middle East tends to cause a decrease in the world supply of oil.

Explain why an increase in demand for a good does not lead to an increase in supply. What does an increase in the demand for a good lead to?

A market can be described by the equations Qd = 60 - 6P and Qs = 4P. Calculate the equilibrium price and quantity in this market.

A market can be described by the equations Qd = 100 - P and Qs = -20 + P. Calculate the equilibrium price and quantity in this market.

What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer.

A market can be described by the equations Qd = 200 - 3P and Qs = -50 + 2P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?

A free market can be described by the equations Q_d = 100 - P and Q_s = -20 + P. What are the equilibrium conditions in this market (that is, find equilibrium P and Q), and what are the maximum gains from trade in this market?

A free market can be described by the equations Q_d= 180 - 3P and Q_s = -50 + 2P. What are the equilibrium conditions in this market (i.e., find equilibrium P and Q) and what are the maximum gains from trade in this market?

A market can be described by the equations Q_d = 100 - P and Q_s = -20 + P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?

A market can be described by the equations Q_d = 300 - 4P and Q_s = 6P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus? Will this market return to equilibrium? Why or why not?

A market can be described by the equations Q_d = 60 - 6P and Q_s = 4P. Calculate the equilibrium price and quantity in this market.

A market can be described by the equations Q_d= 100 - P and Q_s = -20 + P. Calculate the equilibrium price and quantity in this market.

A market can be described by the equations Q_d = 200 - 3P and Q_s = -50 + 2P. At a price of $40, will this market experience a shortage or a surplus and what is the amount of this shortage or surplus?