Reference no: EM13900910
1. List five things that are held constant along a market demand curve, and identify the change in each that would shift that demand curve to the right-that is, that would increase demand.
2. Why is a firm willing and able to increase the quantity supplies as the product price increases?
3. "If a price is not an equilibrium price, there is a tendency for it to move to its equilibrium level. Regardless of whether the price is too high or too low to begin with, the adjustment process will increase the quantity of the good purchased." Explain using a demand and supply diagram.
4. Assume the market for corn is depicted as in the table that appears below.
a. Complete the table below,
b. What market pressure occours when quantity demanded exceeds quantity supplied? Explain.
c. What market pressure occurs when quantity supplied exceeds quantity supplied? Explain.
d. What is the equilibrium price?
e. what could change the equilibrium price?
f. At each price in the first column of the table below, how much is sold?
Price quantity demanded quantity supplied
per Bushel (millions of bushel)(millions of bushel)
surplus/shortage Will price rise or fall
$1.80 320 200_________________________________________________________________
2.00 300 230_________________________________________________________________
2.20 270 270__________________________________________________________________
2.40 230 300_________________________________________________________________
2.60 200 330_________________________________________________________________
2.80 180 350_________________________________________________________________
5. Determine whether each of the following statements is true, false, or uncertain. Then briefly explain each answer.
A) In equilibrium, all sellers can find buyers.
B) In equilibrium, there is no pressure on the market to produce or consume more than is being sold.
C) at prices above equilibrium, the quantity exchanged is equal to the quantity supplied.
D) At prices below equilibrium, the quantity exchanged is equal to the quantity supplies.
6. What are the effects on the equilibrium price and quantity of steel if the wages od steelworkers rise and. simultaneously, the price of aluminum rises?