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#### Economics homework help

September 6, 2018 0 Comment

Chapter 3 Econ 112 Core 153 in Class Practice

#1 Draw a demand curve from the gasoline market scheudle

#2 If the price of gasoline is \$4.50 per gallon, how many gallons will be demanded?

#3 If suppliers drop the price to \$2.50, how many gallons will be demanded?

#4 Suppose the consumers in the gasoline market receive an income increase, sketch what will happen to the demand curve.

#5 – Sketch a downward sloping demand curve for each of the following cases. Don’t forget to label the axis’: price and quantity, and to label the demand curve itself. For each of the determinants, show how the demand curve would shift. Suppose the product is apples.

a. Incomes fall, the good is inferior.

b. The price of a substitute good increases

c. The number of consumers in the market decreases

d. Consumers tastes are less favorable for the product

#6 – Sketch an upward sloping supply curve for each of the following cases. Don’t forget to label the axis’: price and quantity, and to label the supply curve itself. For each of the determinants, show how the supply curve would shift. Suppose the product is apples.

a. New technology makes production much faster

b. The price of a substitute (in production) good decreases

c. Higher taxes are imposed on production of the good

d. There a 20% more sellers in the market

#7 – Graph demand and supply curves from the following data. Be sure to label the axis’ and curves appropriately.

a. Determine the equilibrium price and quantity. Label it Pe and Qe.

b. If the price were \$8, would there be a shortage or surplus? How much?

c. If the price were \$0, would there be a shortage or surplus? How much?

d. Suppose consumer incomes rise, and the good is normal. sketch the curve shift and label the new equilibrium price and quantity, P1 and Q1. Note if price will rise or fall, and if quantity will rise or fall.

e. Suppose input prices decrease. Sketch the curve shift and label the new equilibrium price and quantity, P2 and Q2. Note if price will rise or fall, and if quantity will rise or fall.

#8 – Sketch two market diagrams, complete with Supply and Demand curves.

Note the equilibrium in each.

On the first graph, show the effect of an increase in supply. Note the new equilibrium.

On the other, show the effect of a decrease in demand. Note the new equilibrium

Now using that information, predict the outcome if both supply and demand increase simultaneously.

Price (\$) / galQD

6.50\$ 5

4.50\$ 10

2.50\$ 15

0.50\$ 20

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