EC 202: Principles of Microeconomics

Answer the following questions properly with explanations.

1. What is a competitive market? Briefly describe a type of market that is not perfectly competitive.
2. Does a change in consumers' tastes lead to a movement along the demand curve or to a shift in the demand curve? Does a change in price lead to a movement along the demand curve or to a shift in the demand curve? Explain your answers.

3.Does a change in producers' technology lead to a movement along the supply curve or to a shift in the supply curve? Does a change in price lead to a movement along the supply curve or to a shift in the supply curve?

4.These problems are based on Chapter 4 Problems.For each question below, use a supply-and-demand diagram to show the effects of the following events on (i) demand, (ii) supply, (iii) equilibrium price, and (iv) equilibrium quantity. (2 points each)

A.A cold snap hit Florida and many of the citrus trees fail to produce a crop this year.If all fruits are substitutes, what is the effect on the market for apples?

B.People decide to have less children and have smaller families. What happens to the market for minivans?

C.Unexpected cold weather sweeps through the Midwest and much of the country. What happens to the market for sweatshirts?

5) The market for pizza has the following demand and supply schedules:(Hint: You do not need to create the graph electronically, instead sketch it out on a piece of paper. Take a picture of your graph and insert it into your homework assignment file before submitting.)

a. Graph the demand and supply curves. What are the equilibrium price and quantity in this market?

b. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?

c. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?

6) Assume a market is characterized by the equations in each part of this question. Solve for the equilibrium price and equilibrium quantity in each questionandsketch each mark. (Hint: These are questions from the market equilibrium supplemental questions.)

Demand:P = 50 - Q_DandSupply:P = 5 + Qs

Demand:Q_D= 35 - P andSupply:Qs = 0.5P - 7