Table: Price Controls Price 330 540 5.50 560 5.70 5.80 Quantity Quantity Demanded Supplied O 1000 units 600 units O 400 units 2400 2000 1600 1200 800 400 10 10 Use the above table for the following question. Suppose the government imposes a price ceiling of $70 in this market. What will be the size of the shortage in this market? 200 400 600 800 1000 1200 O 0 (there would be no shortage or surplus) 4

Table: Price Controls Price 330 540 5.50 560 5.70 5.80 Quantity Quantity Demanded Supplied O 1000 units 600 units O 400 units 2400 2000 1600 1200 800 400 10 10 Use the above table for the following question. Suppose the government imposes a price ceiling of $70 in this market. What will be the size of the shortage in this market? 200 400 600 800 1000 1200 O 0 (there would be no shortage or surplus) 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 4-3 Price $20 18 16 14 12 10 8 4 2 10 20 30 40 50 60 70 80 90 100 Quantity 2. Refer to the Figure 4-3. If price in this market is currently S14, what would happen? a. Quantity supplied would be 40 and quantity demanded would be 60. b. Quantity supplied would be 60 and quantity demanded would be 40. c. Quantity supplied would be 50 and quantity demanded would be 50. d. Quantity supplied would be 70 and quantity demanded would be 30.
QUESTION 10 If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to S1.80 will: O A. increase the quantity demanded by about 2.5% O B. decrease the quantity demanded by about 2.5% O C.increase the quantity demanded by about 25% O D. increase the quantity demanded by about 250%
Consider the following figure. What is the Consumer Surplus in this market when the market is at equilibrium? $ Demand and Supply Price $10 $9 - Quantity Demanded $8 $7 Quantity Supplied $6 $5 $4 $3 $2 $1 $0 O 1 2 3 4 5 6 7 8 9 10 Quantity
Price of Gasoline P3 P₂ P₁ 0 9₂ 9₂ 52 D S₁ Price Ceiling Quantity of Gasoline Refer to the figure above. With a price ceiling present in this market, what will happen when the supply curve for gasoline shifts from S₁ to S₂? The market price will stay at P₁ due to the price ceiling. A shortage will occur at the price ceiling of P2. The price will increase to P3. A surplus will occur at the new market price of P₂.
Figure 9-1 Price $50 10 10 15 O 5 units US Supply O 15 units O 10 units O 20 units World price Quantity of leather footwear Figure 9-1 shows the U.S. demand and supply for leather footwear. US Demand Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity demanded?
$4.00 $3.50- $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 0 5 10 15 20 25 30 Quantity A price floor set at a price of $1.00 will result in O no change in the market outcomes. a surplus of 20 units. a surplus of 10 units. a shortage of 20 units. a shortage of 10 units. Price O O Supply Demand 35 40
3.30 3.00 Supply 2.70 2.40 2.10 Demand 1.80 1.50 1.20 0.90 0.60 0.30 50 100 150 200 250 300 350 400 Suppose that a price ceiling is set at $2.70. Which of the following is true? O a. There will be a shortage of 200 units Ob. There will be an excess supply of 100 units Oc. There will be a excess supply of 200 units Od. The ceiling is non-binding
Priçe 4 A D2 2 B 1 D1 1 2 3 4 5 6 7 7 Quantity In this graph, a move from point A to point B represents which of the following? O a decrease in demand O a decrease in quantity demanded an increase in demand O an increase in quantity demanded
1. What is the equilibrium price in this market? 2. What is the equilibrium quantity in this market? 3. At a price of two dollars will there be a surplus or shortage of units in this market? 4. At a price of eight dollars how large of a surplus will there be in this market? 5. If the supply curve shifts to the right, will the price in this market rise or fall?
13. The variety of supply curves The following graph displays four supply curves (LL, MM, NN, and OO) that intersect at point V. PRICE (Dollars per unit) 20 18 16 14 12 10 00 4 2 0 → M 0 2 Statement 4 6 W V N + ++ N X +Y N+ + 8 10 12 QUANTITY (Units) Between points V and Y, curve OO is elastic. L O M ➜ 14 16 18 20 Using the graph, complete the table that follows by indicating whether each statement is true or false. (?) Between points V and W, curve NN is perfectly elastic. Curve OO is less elastic between points V and Y than curve LL is between points V and X. True False O O
Refer to the graph, which shows the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P22 Supply Price P2 P₁ 0 Q₁ Q₂ Quantity D₁ D2 O a. An increase in consumer incomes O b. An increase in the price of a substitute product O c. An increase in production costs O d. A decrease in the price of a complementary product
16) The market for two-bedroom apartments in a city has the onowing supply and acmand schedules: Price 200 400 600 800 1000 1200 1400 1600 1800 QD (thousands) 360 315 270 225 180 135 90 45 0 Qs (thousands) 0 45 90 135 180 225 270 315 360 2000 1800 1600 1400 1200 1000 800 600 400 200 0 O 30 60 90 120 150 180 210 240 270 300 330 360 Ca a. Graph demand and supply. b. What is the equilibrium price and quantity? PE = 460 270000 QE = Calculate Consumer Surplus, Producer Surplus, and Total Surplus. Illustrate CS & PS on the grid above. 036