6.Connect Problem CP 03-11

If the income of buyers decreases, and good A is an inferior good, the (Click to select) quantity demanded of good A demand for good A will (Click to select) decrease increase .

This will cause the equilibrium price to (Click to select) decrease be indeterminate increase and the equilibrium quantity to (Click to select) increase decrease be indeterminate .

7. Review Question 03-08

Label each of the following scenarios with the correct combination of price change and quantity change that occur in each scenario. In some scenarios, it may not be possible from the information given to determine the direction of a particular price change or a particular quantity change. We will symbolize those cases as, respectively, "P?" and "Q?".

1. On a hot day, both the demand for lemonade and the supply of lemonade increase.

Price: (Click to select) Increases Decreases P?

Quantity: (Click to select) Q? Decreases Increases

1. On a cold day, both the demand for ice cream and the supply of ice cream decrease.

Price: (Click to select) P? Decreases Increases

Quantity: (Click to select) Decreases Increases Q?

1. When Hawaii's Mt. Kilauea erupts violently, tourists' demand for sightseeing flights increases but the supply of pilots willing to provide these dangerous flights decreases.

Price: (Click to select) Increases P? Decreases

Quantity: (Click to select) Decreases Increases Q?

1. In a hot area of Arizona where a lot of electricity is generated with wind turbines, the demand for electricity falls on windy days as people switch off their air conditioners and enjoy the breeze.But at the same time, the amount of electricity supplied increases as the wind turbines spin faster.

Price: (Click to select) P? Increases Decreases

Quantity: (Click to select) Decreases Increases Q?

8. Connect Problem CP 03-11 (algo)

If the income of buyers increases, and good A is a normal good, the (Click to select) demand for good A quantity demanded of good A will (Click to select) increase decrease .

This will cause the equilibrium price to (Click to select) be indeterminate decrease increase and the equilibrium quantity to (Click to select) decrease increase be indeterminate .

9.ADVANCED ANALYSIS Assume that demand for a commodity is represented by the equation

P=100.2Qd.

Supply is represented by the equation

P=2+0.2Qs,,

where Q_d and Q_s are quantity demanded and quantity supplied, respectively, and P is price.

Instructions: Enter your answers as a whole number.

Using the equilibrium condition Q_s = Q_d, solve the equations to determine equilibrium price and equilibrium quantity.

Equilibrium price = $

Equilibrium quantity = unit

10. Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The market demand and the individual demands of Tex, Dex, and Rex are shown in the following table.

1. Fill in the missing values (gray-shaded cells) in the table.

1. Which buyer demands the least at a price of $5?

(Click to select) Tex Dex Rex

The most at a price of $7?

(Click to select) Dex Tex Rex

1. Which buyer's quantity demanded increases the most when the price decreases from $7 to $6?

(Click to select) Tex Rex Dex

1. In which direction would the market demand curve shift if Tex withdrew from the market?

(Click to select) Shift to the left Shift to the right No movement

What would happen to the market demand curve if Dex doubled his purchases at each possible price?

(Click to select) No movement Shift to the left Shift to the right

1. Suppose that at a price of $6, the total quantity demanded increases from 19 to 38. Is this a "change in the quantity demanded" or a "change in demand"?

(Click to select) Change in demand Change in the quantity demanded