Chapter 4 bushels of wheat and 48 pounds of beef

subject Type Homework Help
subject Pages 9
subject Words 1690
subject Authors N. Gregory Mankiw

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The Market Forces of Supply and Demand 1075
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1078 The Market Forces of Supply and Demand
Problems
1.
A group of buyers and sellers of a particular good or service is called a
2.
Since individual buyers and individual sellers in a competitive market have no influence on the
market price, what do
we call the buyers and sellers in a competitive market?
Table 4-14
The table below shows the quantities demanded of milk per month by four families at various
prices.
Price of Gallon of
Milk
The Johnson
Family
The Harris
Family
The Patel Family
$3.00
15
12
14
$4.00
12
10
10
$5.00
9
8
6
$6.00
6
6
2
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The Market Forces of Supply and Demand 1079
3.
Refer to Table 4-14. If the four families listed are the only demanders in this market and the price
of a gallon of milk
is $4.00, what is the market quantity demanded?
4.
Refer to Table 4-14. If the four families listed are the only demanders in this market and the price
of a gallon of milk
increases from $4.00 to $5.00, what is the change in the market quantity
demanded?
Figure 4-28
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5.
Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if
consumer incomes
increase and this is an inferior good.
6.
Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the
price of a
substitute for this good becomes more expensive.
7.
Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the
price of this good
increases.
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8.
Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a
news report stated
that the price of this good was expected to increase next week.
9.
Studies show that lower cigarette prices are associated with greater use of marijuana; therefore,
tobacco and
marijuana are
Figure 4-29
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10.
Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded
change?
11.
Refer to Figure 4-29. The movement from S1 to S2 is a
12.
According to the law of demand, when price increases the quantity demanded of a good
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13.
Does a change in the price in a market result in a shift of the demand curve or in a movement
along the demand
curve?
14.
If income rises in the market for an inferior good, will the demand curve for the inferior good shift
to the right or to
the left?
15.
If income rises in the market for a normal good, will the demand curve for the normal good shift
to the right or to the
left?
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16.
Suppose goods A and B are substitutes. If the price of good A increases, will the demand for
good B increase or
decrease?
17.
Suppose goods A and B are complements. If the price of good A increases, will the demand for
good B increase or
decrease?
18.
Suppose consumers expect the price of a good to be higher in the future than it is today. Would
the current demand
for the good increase or decrease?
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19.
Suppose the number of buyers in a market decreases. As a result, would the demand curve in this
market shift to the
right or to the left?
Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices
listed.
Price per case
Alpine Springs
Brook Mountain
Cascade Waters
Dew Good
$0.00
0 cases
0 cases
0 cases
0 cases
$3.00
100 cases
40 cases
60 cases
100 cases
$6.00
200 cases
80 cases
120 cases
200 cases
$9.00
300 cases
120 cases
180 cases
300 cases
20.
Refer to Table 4-15. If all four suppliers operate in this market, what is the market quantity
supplied when the price
is $6.00 per case?
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21.
Refer to Table 4-15. If only Brook Mountain and Cascade Waters operate in this market, what
is the market
quantity supplied when the price is $3.00 per case?
22.
Refer to Table 4-15. Assuming these are the only four suppliers in this market, the function for
market supply can
be written as QS=
23.
Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function
for market demand
is QD=1000-100P, where QD is the quantity demanded and P is the price,
what is the equilibrium price?

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