the first kilogram of potatoes is worth $150, the second kilogram is worth $114, the third kilogram is worth $105, and all subsequent 1 Potatoes cost Janice $1.10 per kilogram, and she has $6.00 that she could possibly spend on potatoes or other items. If she feels that kilograms are worth $0.30, how many kilograms of potatoes will she purchase? What if she only had $3.00 to spend? Janice will purchase kilograms with her original $6.00 of income. gems Janice will purchase kilograms when her income is $3.00. eBook 5 Demand and supply often shift in the retail market for gasoline. Here are two demand curves and two supply curves for litres of gasoline in the month of May in a small town in New Brunswick. Quantities Demanded Quantities Supplied Price D1 D2 S1 S2 $5. 00 5,000 7,500 9 , 000 9 , 500 2 6,000 8,000 8, 000 9,000 points 3. 00 8,500 8, 500 9,000 5,000 eBook a. Use the following facts to fill in the missing data in the table. . If demand is D1 and supply is S1, the equilibrium quantity is 7,000 litres per month. . When demand is D2 and supply is S1, the equilibrium price is $4.00 per litre. . When demand is D2 and supply is S1 , there is an excess demand of 4,000 litres per month at a price of $2.00 per litre. . If demand is D1 and supply is S2 , the equilibrium quantity is 8,000 litres per month. Instructions: Fill the missing data in the table above. b. Compare two equilibriums. In the first, demand is D, and supply is S1 . In the second, demand is D1 and supply is S2. By how much does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity (Click to select) : by litres per month. Equilibrium price (Click to select) by $ c. If supply falls from S2 to S1 while demand declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? The equilibrium price ( (Click to select) +).b. Compare two equilibriums. In the first, demand is D, and supply is S1 . In the second, demand is D, and supply is S2. By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity (Click to select) : by litres per month. Equilibrium price (Click to select) : by $ 2 points c. If supply falls from S2 to S1 while demand declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? eBook The equilibrium price (Click to select) What if only supply falls? The equilibrium price (Click to select) ;). What if only demand falls? The equilibrium price (Click to select) d. Suppose that supply is fixed at S1 and that demand starts at D1. By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per month1:. Compare two equilibriums' In the first, demand is D1 and supply is $1 a In the second, demand is D1 and supply is 52. By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantit v: is , l i jgby litres per month decreases Equilibrium price [ increases 3y$ 2 points c. If supply falls from $2 to S1while demand declines from D; to D1, does the equilibrium price rise, fall, or stay the same? eBook The equilibrium price (clickio select) . . What if only supply falls? The equilibrium price . What if only demand falls? The equilibrium price . d. Suppose that supply is fixed at 51 and that demand starts at D1' By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per month b. Compare two equilibriums. In the first, demand is D1 and supply is S1 . In the second, demand is D, and supply is S2. By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity ((Click to select) by litres per month. Equilibrium price (Click to select) Diby $ [ 2 rises points c. If supply falls falls le demand declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? The equilibrium price ((Click to select) ; ) eBook What if only supply falls? The equilibrium price ((Click to select) 4. What if only demand falls? The equilibrium price (Click to select) 4 d. Suppose that supply is fixed at S1 and that demand starts at D1. By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per monthb. Compare two equilibriums. In the first, demand is D1 and supply is S1 . In the second, demand is D1 and supply is S2. By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity (Click to select) ) by litres per month. Equilibrium price (Click to select) : by $ 2 points c. If supply falls from S2 to S1 while demand declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? eBook The equilibrium pric (Click to select) falls What if only supply 1 remains the same rises The equilibrium price (CIICK to select) What if only demand falls? The equilibrium price ((Click to select) 4. d. Suppose that supply is fixed at S1 and that demand starts at D1. By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per monthb. Compare two equilibriums. In the first, demand is D, and supply is S1 . In the second, demand is D, and supply is S2. By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity (Click to select) ) by litres per month. Equilibrium price (Click to select) ) by $ 2 points c. If supply falls from S2 to S1 while demand declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? eBook The equilibrium price ((Click to select) What if only supply falls? The equilibrium pric v (Click to select) falls What if only demand rises remains the same The equilibrium price ((CIICK TO select) d. Suppose that supply is fixed at S1 and that demand starts at D1. By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per monthb. Compare two equilibriumst In the first, demand is D1 and supply is $1 t In the second, demand is D1 and supply is 52 By how much 5 does the equilibrium quantity change? By how much does the equilibrium price change? Equilibrium quantity (Click to select) : by litres per month. Equilibrium price | (Clickto select) c | by$ 2 points c. If supply falls from $2 to 51 while demand declines from D; to D1, does the equilibrium price rise, fall, or stay the same? eBook The equrllbnum price t What if only supply falls? The ecuilibrium price . What if only demand falls? The ecuilibrium pric l, :i remains the same d. Supaose that sup falls 1d that demand starts at D1. rises By how many litres per month WOUIO demand have to increase at each price level such that the equilibrium price per litre would be $4? litres per month By how many litres per month would demand have to increase at each price level such that the equilibrium price per litre would be $5? litres per month resources in producing those loaves is 6 units of labour, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at 2 With current technology, suppose a firm is producing 400 loaves of banana bread daily, Also assume that the leastcost combination of per unit prices of $40, $60, $60, and $20, respectively If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? 2 $ points What is its total cost? eEook $ What is the firm's profit or loss? Instructions: Leave no cell blank - be certain to enter "0" wherever required. If you are entering any loss amount, be sure to enter it as positive value. The firm generates | (Click to select) | of $ Will it continue to produce banana bread? (Click to select) : If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bread? I (Click to select) 3 I resources in producing those loaves is 6 units of labour, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at 2 With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of per unit prices of $40, $60, $60, and $20, respectively. If the rm can sell these 400 loaves at $2 per unit, what is its total revenue? 2 5: points What is its total cost? eEook $ What is the rm's prot or loss? Instructions: Leave no cell blank - be certain to enter "0" wherever required. If you are entering any loss amount, be sure to enter it as positive value. The firm generate: ll ,1. neither an economic profit nor a loss Will it continue to | an economic profit (Click to select) : If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bread? an economic loss | (Click to select) . | resources in producing those loaves is 6 units of labour, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at 2 With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of per unit prices of $40, $60, $60, and $20, respectively If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? 2 s points What is its total cost? eEook $ What is the rm's profit or loss? Instructions: Leave no cell blank - be certain to enter "0" wherever required. If you are entering any loss amount, be sure to enter it as positive value. The rm generates | (Click to select) : l of $ Will it continue to produce banana bread? No Yes tion is typical for the other makers of banana bread, will resources flow toward or away from this bread? | (Click to select] c l resources in producing those loaves is 6 units of labour, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at 2 With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of per unit prices of $40, $60, $60, and $20, respectively, If he rm can sell these 400 loaves at $2 per unit, what is its total revenue? 2 7 points $ What is its total cost? $ eEook What is the firm's profit or loss? Instructions: Leave no cell blank - be certain to enter "0" wherever required. If you are entering any loss amount, be sure to enter it as positive value. The firm generates | (Click to select) c | of $ Will it continue to produce banana bread? (Click to select) : If this firm's situation is typical for the other makers of banana bread. will resources flow toward or away from this bread? There will be no change in resource flow toward this bakery good. Resources will ow toward this bakery good, Resources will flow away from this bakery good. 3 The table below contains information on three techniques for producing $15 worth of bar soap. Assume that we specified "$20.00 worth of bar soap"; because soap costs $4.00 per bar and all three techniques produce 5 bars of soap ($20.00 = $4.00 per bar x 5 bars). So you know each technique produces 5 bars of soap. Units of Resource Price per Technique 1 Technique 1 Technique 2 Technique 2 Technique 3 Technique 3 2 Resource Unit Units Cost Units Cost Units Cost points Labor $2 4 $8 2 $4 $2 Land 1 3 4 H W Capital W W H 3 w 6 eBook Entrepreneurial ability 1 3 Total cost of $15 worth of bar soap $15 $13 $15 a. What technique will you want to use if the price of a bar of soap falls to $3.75 v (Click to select) . Technique 1 Technique 2 Technique 3 Which technique will you use if the price of a bar of soap rises to $5.25? ((Click to select) , J Which technique will you use if the price of a bar of soap rises to $6.25? ((Click to select) ; ) b. How many bars of soap will you want to produce if the price of a bar of soap falls to $1.80? O Zero: It is not profitable to produce bars of soap at this selling price Five: It is profitable to produce bars of soap at this selling pricec. Suppose that the price of soap is again $400 per bar but that the prices of all four resources are now $1.5 per unit. Which is now the least-profitable technique? . all If the resource prices return to their original levels (the ones shown in the table), but a new technique is invented that can produce 2.25 bars of soap using 1 unit of each of the four resources, will firms prefer the new technique? it: w r: w-lr v'i' No Yes Demand: P: 10 0.20d and Supply. P= 6 + 0.2 05 q The demand and supply for a particular commodity are given by the following two equations: Where Gdand OS are quan ity demanded and quantity supplied, respectively, and Pis price. 2 ' Using the equilibrium condition as = 0d, determine equilibrium price and equilibrium quantity. Wm\" Equilibrium price = $ Equilibrium quantity = units Graph the two equations to substantiate your answer Instructions: 1. Use the line tools Cd and 05 to draw the demand and supply curves for P = 6 and 10. 2. Use the drop line tool E to identify the equilibrium quantity and price. 6) eEook 12 Tools / / 1O Qd Q: 8 , g 6 E E 4 Instructions: 1. Use the line tools Qd and Qs to draw the demand and supply curves for P = 6 and 10. 2. Use the drop line tool E to identify the equilibrium quantity and price. 2 12 points Tools 10 eBook Qd as 8 Price 6 E 4 2 0 5 10 15 20 Quantity