1. There is data on three different goods bananas, chocolate, and bonds. Consider the market for bananas at a local produce store. The manager has data on how much consumers will demand and how much his distributors will supply at various prices? What is the market clearing price and quantity? How did you arrive at that result? The Market for Bananas

2. A state government is issuing tax-free bonds to finance the building of a new bridge. The government will issue 10,000 bonds at an auction. The government will take the highest bid, the next highest, and so on until all the bonds are sold. Every winner pays the lowest price. ??What is the market clearing price and quantity? How did you arrive at that result?

Price 50 45 40 35 30 25 20 15 10 5 Supply 100 90 80 70 60 50 40 30 20 10 Demand 35 40 45 40 55 50 55 60 75 80 Price 101 100.5 100 99.5 99 98.5 Supply 10,000 10,000 10,000 10,000 10,000 10,000 Demand 100 500 4,500 4,900 6,100 10,000