Determinants 01' Supply and Demand Which of the factors affecting demand or supply is most relevant when: the demand for skiing in Colorado increases due to a National Weather Service report predicting record snowfall for the upcoming winter season? 2. an increase in lift ticket prices leads to a reduction in the demand for skiing equipment? 3. the demand for oat bran rises due to reports that it helps reduce cholesterol? 4. the demand for many goods and services increases this year when Congress announces a new national sales tax to begin next year? 5. the supply of personal computers increases due to a decrease in the price of memory chips? 6. a hurricane in Florida results in a decrease in the supplyr of citrus fruit? Simple Market Equilibrium Analysis Use this gure to answer the following questions. P 7. The equilibrium market price is? 8. Quantity demanded at a price of $30 is? 9. Quantity supplied at a price of $30 is? 30 II]. A surplus of how much occurs at a price of $30? More Complex Market Analysis Use this gure to answer the following questions concerning three different product markets. questions For each product assume that the market begins in equilibrium at the intersection of D0 and 30 {point e).What is the new equilibrium point in: The market for compact discs (CD5), when: l |. the price of CD players decreases? 12. the economy suffers high unemployment? 13. an energy tax raises the cost ofthe plastic used to manufacture CDs? The market for Spam [inferior good), when: 14. there is a cut in income taxes? 15. the tonight show holds a multimillion dollar Spam sculpting contest? 16. the price of pig feed increases [Spam is a pork product} at the same time that Spam is reported to raise cholesterol levels? IT. the price of bologna [a substitute] decreases at the same time there is a surge in the pig population. The market for four-wheel drive vehicles, when: 13. import tariffs on these vehicles are reduced while the real price of gasoline decreases? 19. population growth rates in mountainous and snowy regions rise well above the national average. 2|]. government regulations require vehicle manufacturers to make costly adjustments in order to improve fuel efciency and reduce auto emissions. Price Controls: Minimum Wage Use the information in this table concerning the market for unskilled labor to answer the following questions. 2|. A minimum wage ot'S per hour would result Quantity of Quantity of in total unemployment of _ million Labor Labor workers. Hourly Supplied Demanded Wage Rate (millions) (millions) 22. _ million unemployed new workers enter 2.00 It] 50 the labor force due to a $6 per hour minimum 3,00 20 4t] wage. 4.00 30 30 5.00I 4D 20 23. A minimum wage ot'Sl per hour would result 6,00 50 10 in total unemployment of _ million 100 50 workers. 3.00 'm 9.00 80 Price Controls: Rent Control Use the information in this table concerning the market for two bedroom apartments to answer the following questions. 24. A rent ceiling of $500 per month would result Monthly Quantity Quantity in a shortage of _ thousand apartments. Rent Supplied Demanded \"50003) (1.000s) 25. A rent ceiling of $600 per month would result 400 5 35 in a shortage of _ thousand apartments. It} 30 500 IS 25 20 20 600 25 1 5 30 10 T00 35 5 40 ll (a) (b) (C) (d) (e) (a) (b) (C) (d) (e) -20 -10 0 10 15 20 25 30 35 40 Answers for HomeWOrk 1-3 (a) (b) (C) (d) (B) (a) (b) (C) (d) (6) point a point b point 0 point (1 point e point f point g point h point i point j (a) (b) (C) (d) (e) (a) (b) (C) (d) (6) Tastes and preferences Income and its distribution Prices of related goods Number and ages of buyers The goods own price Technology Resource costs Prices of other producible goods Expectations Number of sellers