1. Consider the following demand and supply model of the world tea market (in billions of pounds) Price per Pound Quantity Supplied Quantity Demanded Php0. 38 1, 500 525 0.37 1, 000 600 0.36 700 700 0.35 600 900 0.34 550 1, 200 a. Is there a shortage or surplus when the price is La.1 0.38? a.2 0.34? b. What are the equilibrium price and equilibrium quantity? P* Q* c. Graph the supply curve and the demand curve. Show how the equilibrium price and quantity can be found in the graph. Ensure the proper label.
1. Consider the following demand and supply model of the world tea market (in billions of pounds) Price per Pound Quantity Supplied Quantity Demanded Php0. 38 1, 500 525 0.37 1, 000 600 0.36 700 700 0.35 600 900 0.34 550 1, 200 a. Is there a shortage or surplus when the price is La.1 0.38? a.2 0.34? b. What are the equilibrium price and equilibrium quantity? P* Q* c. Graph the supply curve and the demand curve. Show how the equilibrium price and quantity can be found in the graph. Ensure the proper label.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
Transcribed Image Text:46 1:51
Demand and S... /
Answer question no. 1, and 3, correction for no.3 Supply: Q =5 +2P
Disregard the last paragraph under no.3 question.
EXERCISES N0. 2
1. Consider the following demand and supply model of the
world tea market (in billions of pounds)
Quantity Supplied Quantity
Demanded
Price per Pound
Php0. 38
1, 500
525
0.37
1, 000
600
0.36
700
700
0.35
600
900
0.34
550
1, 200
a. Is there a shortage or surplus when the price is
_a.1 0.38?
a.2 0.34?
b. What are the equilibrium price and equilibrium quantity?
Q*
c. Graph the supply curve and the demand curve. Show how the
equilibrium price and quantity can be found in the graph.
Ensure the proper label.
2. Suppose an increase in consumers' income causes a
rightward shift in the demand for computer and a leftward
shift in the demand for radios.
Which are normal good?
Transcribed Image Text:46 1:57
E 49
Demand and S... /
Which is inferior good?
Draw a supply and demand diagram for each to explain how
the price will change in each of this market. Ensure the
proper label.
Demand for Computer
3. Straight line demand and supply curve can be represented by
algebraic equations. Given the following algebraic expression
for supply and demand, calculate the equilibrium price and
quantity by solving the two equations for P and Q.
Supply: Q = 5 + 2P +
Demand: Q = 10 - 2P
Suppose that, due to an increase in consumers' incomes from
0 to $3, the demand curve shifts. That is new demand
equation is:
Q = 10 - 2P + 3Y
Calculate the new equilibrium price and quantity.
II
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education