Suppose the following graph shows the supply of and demand for admission to the University of California, Berkeley, where supply represents the number of student openings and demand represents the number of students who want to attend Berkeley (i.e., the number of student applications) at any given level of tuition. Use the graph to help you answer the questions that follow. You will not be graded on any adjustments made to the graph. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. dollars TUITION (Thousands o 40 40 Admission to the University of California, Berkeley Supply Demand 9 12 NUMBER OF STUDENTS (Thousands) 15 18 -0 Demand 101 Supply (?) The equilibrium level of tuition at Berkeley is per academic year. If Berkeley sets its tuition at this price, the number of openings available will the number of student applications. Now suppose that the tuition for Berkeley is set at $16,000 by California's state assembly. At this level of tuition, the number of student applications will the number of openings available. The new equilibrium level of tuition at Berkeley is Suppose that in its latest issue, a popular magazine publishes information about colleges in the United States. The magazine declares Berkeley to be America's worst party college (that is, the college with the lousiest party scene). Adjust the previous graph to show the effect this will have on the market for admission to Berkeley, assuming that college students like to party. per academic year. If the magazine declares Berkeley to be America's worst party college and the tuition for Berkeley is set at $16,000 by California's assembly, Berkeley will receive applications for admission than there are openings.
Suppose the following graph shows the supply of and demand for admission to the University of California, Berkeley, where supply represents the number of student openings and demand represents the number of students who want to attend Berkeley (i.e., the number of student applications) at any given level of tuition. Use the graph to help you answer the questions that follow. You will not be graded on any adjustments made to the graph. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. dollars TUITION (Thousands o 40 40 Admission to the University of California, Berkeley Supply Demand 9 12 NUMBER OF STUDENTS (Thousands) 15 18 -0 Demand 101 Supply (?) The equilibrium level of tuition at Berkeley is per academic year. If Berkeley sets its tuition at this price, the number of openings available will the number of student applications. Now suppose that the tuition for Berkeley is set at $16,000 by California's state assembly. At this level of tuition, the number of student applications will the number of openings available. The new equilibrium level of tuition at Berkeley is Suppose that in its latest issue, a popular magazine publishes information about colleges in the United States. The magazine declares Berkeley to be America's worst party college (that is, the college with the lousiest party scene). Adjust the previous graph to show the effect this will have on the market for admission to Berkeley, assuming that college students like to party. per academic year. If the magazine declares Berkeley to be America's worst party college and the tuition for Berkeley is set at $16,000 by California's assembly, Berkeley will receive applications for admission than there are openings.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose the following graph shows the supply of and demand for admission to the University of
California, Berkeley, where supply represents the number of student openings and demand
represents the number of students who want to attend Berkeley (i.e., the number of student
applications) at any given level of tuition.
Use the graph to help you answer the questions that follow. You will not be graded on any
adjustments made to the graph.
Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to
move a curve and it snaps back to its original position, just try again and drag it a little farther.
TUITION (Thousands of dollars)
48
40
32
24
16
8
0
0
Admission to the University of California, Berkeley
3
Supply
12
Demand
6
9
NUMBER OF STUDENTS (Thousands)
15
18
Demand
--
Supply
?
The equilibrium level of tuition at Berkeley is
tuition at this price, the number of openings available will
applications.
per academic year. If Berkeley sets its
the number of student
The new equilibrium level of tuition at Berkeley is
Now suppose that the tuition for Berkeley is set at $16,000 by California's state assembly. At this
level of tuition, the number of student applications will
the number of openings
available.
Suppose that in its latest issue, a popular magazine publishes information about colleges in the
United States. The magazine declares Berkeley to be America's worst party college (that is, the
college with the lousiest party scene). Adjust the previous graph to show the effect this will have
on the market for admission to Berkeley, assuming that college students like to party.
per academic year.
If the magazine declares Berkeley to be America's worst party college and the tuition for Berkeley
is set at $16,000 by California's assembly, Berkeley will receive
admission than there are openings.
applications for
Expert Solution
Step 1
Demand-supply equilibrium:
The demand function determines the willingness to pay of an individual for each unit of the quantity he or she wishes to consume.
Whereas, the supply function signifies the supplier's willingness to produce at each price.
The market equilibrium is derived where demand equates the supply.
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