MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
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Question
Chapter 5.A, Problem 9QE
(a)
To determine
Impact of
(b)
To determine
Impact of price of $1.50.
(c)
To determine
Impact of price of $2.25.
(d)
To determine
Impact of price of $2.50.
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Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as shown in the accompanying table.a. What is the equilibrium price? What is the equilibrium quantity? Fill in the surplus-shortage column and use it to explain why your answers are correct.b. Graph the demand for wheat and the supply of wheat. Be sure to label the axes of your graph correctly. Label equilibrium price P and equilibrium quantity Q. c. Why will $3.40 not be the equilibrium price in this market? Why not $4.90? “Surpluses drive prices up; shortages drive them down.” Do you agree?
Suppose that the U.S. government places a ceiling on the price of a medical drug of $7.
1.) Using the point drawing
tool,
plot the quantity supplied on the supply line and label it.
2.) Using the point drawing
tool,
plot the quantity demanded on the demand line and label it.
3.) Using the double arrow
line,
indicate, via a label, the shortage or surplus.
Carefully follow the instructions above, and only draw the required objects.
What is the equilibrium price? At what price is there neither a shortage nor a surplus? Fill in the surplus-shortage column and use it to confirm your answers.
Graph the demand for wheat and the supply for wheat. Be sure to label the axes of your graph correctly. Label equilibrium price P and equilibrium quantity Q.
How big is the surplus or shortage at $3.40? At 4.90? How big a surplus or shortage results if the price is 60 cents lower than the equilibrium price?
Thousands Thousands Surplus (+)
of Bushels Price per of Bushels or
demanded Bushel Supplied Shortage (-)
85 $3.40 72 ___________
80 3.70 73 ___________
75 4.00 75…
Chapter 5 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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- Use Exhibit 1. Which of the following statements is (are) correct? A. A decrease in demand would cause a surplus at the original price and the equilibrium price would fall below $18.B. A decrease in supply would cause a shortage and the quantity sold would decrease such that the equilibrium quantity is less than 600 units.C. If the actual price was $18, then the market would be at its equilibrium price.D. All of the above are correctE. A and B, onlyarrow_forwardPRICE $4 Supply Demand 0 10 QUANTITY (units) In the market shown in the graph above, at a price of $5, there will be (A) a surplus and the price will eventually fall D B a surplus generating a decrease in demand a shortage and the price will eventually rise a shortage generating an increase in supply ய E an increase in supply and a decrease in demandarrow_forwardAssume that demand for a commodity is represented by the equation P = 20 0.4Qd and supply by the equation P = 8 + 0.1Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. a. Calculate the equilibrium of price and equilibrium of quantity in the market.arrow_forward
- Assume that we are looking at the market for snowblowers in December. The initial equilibrium is at a price of $500 and quantities of 1,000. Assume that December begins with three massive blizzards, how might this impact the snowblower market? Demand will shift to the right, causing a surplus, which causes prices to increase until we end up with higher prices and a greater quantity. Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a lessor quantity. Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a greater quantity. Demand will shift to the right, causing a shortage, which causes prices to decrease until we end up with higher prices and a greater quantity.arrow_forwardThis is the market for HOT CHOCOLATE, which is a normal good and is produced with cocoa beans. We know that hot tea is a substitute for hot chocolate and whipped cream is a complement. Quantity Surplus or Price Quantity Supplied Demanded Shortage $5 6,000 10,000 $4 8,000 8,000 $3 10,000 6,000 $2 12,000 4,000 $1 14,000 2,000 1. Complete the table above finding a Shortage or a Surplus. Draw a graphical illustration of the market and find the equilibrium price and equilibrium quantity. For the remaining questions, explain by words or show graphically how equilibrium price and equilibrium quantity of hot chocolate would change (due to changes in Supply or Demand) if: 2. The price of cocoa beans falls; 3. The price of tea falls; 4. Consumer income falls because of a recession.arrow_forwardThe following graph shows the monthly demand and supply curves in the market for shirts. (a). The equilibrium price in this market is $_________ per shirt and the equilibrium quantity is _________ shirts bought and sold per month. (b). Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices. Price (Dollars per shirt) Shortage or Surplus Shortage or Surplus Amount (Shirts) Pressure on Price: Downward or upward? 48 32arrow_forward
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