Search & Filtering
Q-1. Explain each of the following statements using supply-and-demand diagrams.
a. “When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”
b. “When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts plummets.”
c. “When a war breaks out in the Middle East, the price of gasoline rises and the price of a used Cadillac falls.”
Q-2. “An incr.ease in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.” Is this statement true or false? Explain
Q-3. Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans.
a. People decide to have more children.
b. A strike by steelworkers raises steel prices.
c. Engineers develop new automated machinery
for the production of minivans.
d. The price of sports utility vehicles rises.
e. A stock market crash lowers people’s wealth.
Q-4. Consider the markets for film streaming services, TV screens, and tickets at movie theaters.
a. For each pair, identify whether they are complements or substitutes:
• Film streaming and TV screens
• Film streaming and movie tickets
• TV screens and movie tickets
b. Suppose a technological advance reduces the cost of manufacturing TV screens. Draw a diagram to show what happens in the market for TV screens.
c. Draw two more diagrams to show how the change in the market for TV screens affects the markets for film streaming and movie tickets.
Q-5. Over the past 40 years, technological advances have reduced the cost of computer chips. How do you think this has affected the market for computers? For computer software? For typewriters?
Q-6. Using supply-and-demand diagrams, show the effect of the following events on the market for sweatshirts.
a. A hurricane in South Carolina damages the cotton crop.
b. The price of leather jackets falls.
c. All colleges require morning exercise in appropriate attire.
d. New knitting machines are invented.
Q-7. The market for pizza has the following demand and supply schedules:
Price Quantity Demanded Quantity Supplied
4 135 26
5 104 53
6 81 81
7 68 98
8 53 110
9 39 121
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?
The population in country C decreases due to low birth rate. At tge same time the there is an increase the cost of fertilizers which is used to grow vegetable .explain how the market of vegetables will be affected by this changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes .make use of a combination of diagrams and verbal explanations to your answer (10) marks
The cost of sunflower seeds has increased .sunflower seeds are an input when sunflowers are produced .explain verbally how this change will affect the market of sunflowers (5) marks
Given the following demand curves facing a monopoly : Q = 14 - 2P Find the profit maximising price and output of the monopolist, if she has constant marginal cost of Rs 5. How will the total surplus in this market will change if she practices perfect price discrimination ?
