3.The following table shows Stacey's monthly demand schedule for medium-sized cups of coffee. The variables that are held fixed in the demand schedule are Stacey's income, tastes and expectations about future prices, and the prices of substitutes and complements.

Price Quantity of medium coffees

($) (Cups per month)

0.50 120

1.00 100

1.50 80

2.00 60

2.50 40

1.) Use the point drawing tool to plot the points on Stacey's demand curve for medium coffees.

2.) Using the line drawing tool, connect the points to draw the demand curve. Label this line 'Demand'.

Carefully follow the instructions above, and only draw the required objects.

Based on the demand curve you have just drawn, if the price of a medium coffee is $1.75, how many cups of coffee would Stacey be willing to purchase?

A.80

B.60

C.50

D.70

6.Suppose that each of the 100 pizza firms produces 400 pizzas per month at a price of $10 for a total of 40,000 pizzas per month. Suppose the price of pizzas then increases to $12 and everyone expects the price to stay at that higher level.

We expect the quantity of pizzas supplied to

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as the price of pizza

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, the number of pizza firms

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and the output per firm

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.

A pizza firm that enters the market due to the higher price is likely to have a

lower

higher

marginal cost of production than an original firm.

7.Shown on the right is the market for tickets to a Major League Baseball franchise.

To boost attendance, the franchise signed the game's biggest star to a multi-year contract.

1.) Using the line drawing tool, show how this change effects either supply and/or demand. Properly label any lines that you draw.

2.) Using the point drawing tool, plot the new market equilibrium. Label this point 'E'.

Carefully follow the instructions above, and only draw the required objects.

8.The Oconomowoc Tool Company manufactures wrenches at its plant in Wisconsin and the company's demand and supply curves are shown to the right. A recent flood has damaged its warehouse facility, and many of the tools inside the warehouse have been lost.

1.) Using the line drawing tool, show how this change affects either supply and/or demand. Properly label any lines that you draw.

2.) Using the point drawing tool, plot the new market equilibrium. Label this point 'E'.

Carefully follow the instructions above, and only draw the required objects.

9.Using the demand and supply graph to the right, predict the implications of an increase in consumer income for the market for pizza if pizza is a normal good.

1.) Using the line drawing tool, show how this change effects either supply and/or demand. Properly label your line.

2.) Using the point drawing tool, plot the new market equilibrium. Label this point 'E'.

Carefully follow the instructions above, and only draw the required objects.

12.Use the line drawing tool to draw and properly label a new line on the demand and supply graph to the right to predict the implications of a decrease in the price of a substitute good such as tacos for the market for pizza.

Carefully follow the instructions above, and only draw the required objects.

The equilibrium price of pizza will

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and the equilibrium quantity will

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.