Carefully explain what is happening in the following markets. Indicate the impact if any on demand, supply, price and quantity. A new discovery in computer manufacturing has made computer production cheaper. Also, the popularity and usefulness of computers continues to grow. Impact on demand: _________ Impact in supply: _ Impact in price: Impact in quantity: USE THE OPTIONS BELOW TO FILL IN THE BLANK SPACES: Excess demand Change in price is uncertain Change in quantity is uncertain Increase equilibrium Increase towards equilibrium Decrease equilibrium quantity Decrease equilibrium price No impact Shift outwards/to right Increase equilibrium quantity Shift inwards/to left Decrease towards equilibrium Excess Supply 2. Carefully explain what is happening in the following market indicate the impact if any on demand, supply, price, and quantity. In the new academic year the university mandates that all new students must take principles of economics as a core requirement for their majors. Concurrently, the bookshop made their order for principles of economics textbook based on the number of registered students in the previous academic year. Hint: in the previous academic year only economics and management studies majors were required to take principles of economics. Impact on price:_ Impact on quantity: Impact on demand: _______ USE THE OPTIONS BELOW TO FILL IN THE BLANK SPACES: Impact on supply Change in quantity is uncertain decrease equilibrium price Increase towards equilibrium shift towards / to right Excess demand decrease towards equilibrium Shift inwards / to lift Increase equilibrium quantity excess supply shift outwards / to right decrease equilibrium quantity change in price uncertain increase equilibrium price no impact

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Carefully explain what is happening in the following markets. Indicate the impact if any on demand, supply, price and quantity.

A new discovery in computer manufacturing has made computer production cheaper. Also, the popularity and usefulness of computers continues to grow.

Impact on demand: _________________

Impact in supply: _________________

Impact in price: __________________

Impact in quantity: ________________

USE THE OPTIONS BELOW TO FILL IN THE BLANK SPACES:

Excess demand
Change in price is uncertain
Change in quantity is uncertain
Increase equilibrium
Increase towards equilibrium
Decrease equilibrium quantity
Decrease equilibrium price
No impact
Shift outwards/to right
Increase equilibrium quantity
Shift inwards/to left
Decrease towards equilibrium
Excess Supply

2. Carefully explain what is happening in the following market indicate the impact if any on demand, supply, price, and quantity.

In the new academic year the university mandates that all new students must take principles of economics as a core requirement for their majors. Concurrently, the bookshop made their order for principles of economics textbook based on the number of registered students in the previous academic year.

Hint: in the previous academic year only economics and management studies majors were required to take principles of economics.

Impact on price:_____________

Impact on quantity:______________

Impact on demand: _______________

USE THE OPTIONS BELOW TO FILL IN THE BLANK SPACES:

Impact on supply
Change in quantity is uncertain
decrease equilibrium price
Increase towards equilibrium shift towards / to right
Excess demand
decrease towards equilibrium
Shift inwards / to lift
Increase equilibrium quantity excess supply
shift outwards / to right decrease equilibrium quantity change in price uncertain
increase equilibrium price
no impact

Suppose that the government imposes a tax on the market. D is the demand curve before tax, S is the supply
curve before tax and S after tax is the supply curve after the tax. Use the graph to answer the following
questions:
7
6.5
6
5.5
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
price
5 10 15 20 25 30 35 40 45 50 55 60 65 70 quantity
The equilibrium price in the market before the tax is imposed is $
The price paid by buyers after the tax is imposed is $
Buyers pay
The price sellers receive after the tax is imposed is $
The amount of the tax per unit is $
Sellers pay
S after tax
$
$
S
of the tax per unit.
of the tax per unit.
The government tax revenue is $
The deadweight loss of the tax is
D

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2. Carefully explain what is happening in the following market indicate the impact if any on demand, supply, price, and quantity.

Hint: in the previous academic year only economics and management studies majors were required to take principles of economics.

Impact on supply: ____________

Impact on price:_____________

Impact on quantity:______________

Impact on demand: _______________

USE THE OPTIONS BELOW TO FILL IN THE BLANK SPACES Above:

Impact on supply
Change in quantity is uncertain
decrease equilibrium price
Increase towards equilibrium shift towards / to right
Excess demand
decrease towards equilibrium
Shift inwards / to lift
Increase equilibrium quantity excess supply
shift outwards / to right decrease equilibrium quantity change in price uncertain
increase equilibrium price
no impact

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