(Table: Market for Butter) Use Table: Market for Butter. If the government imposes a price floor of $0.90 per pound of butter, the quantity of butter actually purchased will be million pounds. Table: Market for Butter P Qs $1.20 9.0 12.0 1.10 9.5 11.0 1.00 10.0 10.0 0.90 10.5 9.0 0.80 11.0 8.0 Note: P = price per lb. in $; Qp = Quantity demanded in millions of Ibs.; Os = Quantity supplied in millions of Ibs. %3D %3D 9.0 O 10.5 O 10.0 O 1.5

(Table: Market for Butter) Use Table: Market for Butter. If the government imposes a price floor of $0.90 per pound of butter, the quantity of butter actually purchased will be million pounds. Table: Market for Butter P Qs $1.20 9.0 12.0 1.10 9.5 11.0 1.00 10.0 10.0 0.90 10.5 9.0 0.80 11.0 8.0 Note: P = price per lb. in $; Qp = Quantity demanded in millions of Ibs.; Os = Quantity supplied in millions of Ibs. %3D %3D 9.0 O 10.5 O 10.0 O 1.5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The table below shows the total demand and supply for bushels of wheat per month. Price per bushel ($) Demand Supply (*000) ('000) 85 3.40 72 80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81 Required: The government concluded to establish a price ceiling for bushels of wheat at $3.70. Explain the effect of such action by the government. (i)
What are the consequences of this restriction on quantity? (surplus/shortage) Explain.
1 Using an appropriate demand and supply diagram, explain the impact on the market price and quantity traded in each of the following cases: d) The market for Samsung digital cameras following new technologies that improve productivity in its factories. a) The market for air travel following the imposition of higher fuel taxes. b) The market for Pepsi Cola following a fall in the price of Coca-Cola. 51 5 c) The market for sushi following a successful marketing campaign promoting the health benefits from eating rice and raw fish. [5} d) The market for Samsung digital cameras following new technologies that improve productivity in its factories.
21. Supply: Basic concepts Complete the following table by selecting the term that matches each definition. Quantity Supplied Supply Curve Supply Schedule Law of Definition Supply The amount of a good that sellers are willing and able to supply at a given price The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology. Your coworker Musashi is really concerned about a project that he has just been assigned. He is in charge of analyzing and determining conditions in the market for televisions from an extensive sales…
2. The following data represent the demand schedule and supply schedules of a certain commodity. Based on this information, answer questions 1, 2, 3 and 4 properly. Price $9 8 7 6 5 4 quantity demanded 50 47 44 41 38 35 32 29 quantity supplied 22 26 30 34 38 42 46 50 3 2 1 26 54 1. Sketch the demand schedule and supply schedule in the same Label the equilibrium price (Pe) and the equilibrium quantity (Qe) properly. 2. Determine (tabulate) the equilibrium and equilibrium quantity. Use the surplus and shortage columns to illustrate your analysis. 3. Is a price of $7.50 an equilibrium price? If yes why and if not why not? 4. Is a price of 3.75 an equilibrium price? If yes, why and if not why not?
Q1.
(Table: The Lemonade Market) Use Table: The Lemonade Market. If the price of lemonade is $1.25 per cup, we expect to see a: Table: The Lemonade Market Price of Lemonade (per cup) $0.50 0.75 1.00 1.25 1.50 1.75 Number of Cups Demanded (QD) 250 200 150 100 50 20 Number of Cups Supplied (Qs) 25 50 75 100 125 150 A) rising price to eliminate the shortage. D) market in equilibrium. B) rising price to eliminate the surplus. C) falling price to eliminate the shortage.
13. Suppose over the next several years the level of income and wealth rises in the state of Florida. For the housing market this would mean: An increase in the quantity of houses demanded, rising prices and an increase in supply. An increase in the demand for houses, rising prices and an increase in quantity supplied. An increase in the quantity of houses demanded shortages and higher prices. A decrease in the quantity of houses supplied as demand increases. Price gouging in this market would be rampant.
14. Understanding changes in equilibrium price and quantity Suppose you are an analyst in the oil refinery industry and are responsible for estimating the equilibrium price and quantity of home heating oil. To do so, you must consider factors that can affect the supply of and demand for heating oil. Determinants of the demand for heating oil include household income, the price of an oil furnace (a complementary good for heating oil), and the price of natural gas (a substitute good for heating oil). Determinants of the supply of heating oil include the cost of crude oil and the cost of refining crude oil into home heating oil. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to the graph parameters. (Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.) PRICE (Dollar per barrel) 8 28 28 2 20 80 70 60 50 40 30 20 ++ 0 Market for Heating Oil 1 1…
14. Application: Demand elasticity and agriculture The following graph illustrates the market for walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose an increase in pests destroys a major portion of walnut trees. Show the effect this shock has on the market for walnuts by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per ton) 40 32 8 0 8 16 I I 1 11 24 Supply Demand QUANTITY (Thousands of tons) 32 Total Revenue (Thousands of Dollars) 40 Demand D Supply ? One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using…
16. Suppose over the next 10 years the technology associated with producing electric cars advances greatly while the number of buyers in the market increases only slightly. This would mean that: The price of electric cars would continue to fall. The price of electric cars would not change but quantity would increase. Quantity supplied would rise, prices would fall, and demand would increase due to the falling prices. The price of gas-powered cars would fall. A and D only.
3. Indicate how each of the following will affect the current supply (Increase supply or Decrease Supply) for personal computers. a) A rise in wage rates b) An increase in the number of sellers of computers c) A tax placed on the production of computers d) A subsidy placed on the production of computers