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(338 solutions)

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12. Market equilibrium and disequilibrium

The following graph shows the monthly demand and supply curves in the market for kettles.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Graph Input Tool
Market for Kettles
 
Price
(Dollars per kettle)
 
Quantity Demanded
(Kettles)
 
Quantity Supplied
(Kettles)
The equilibrium price in this market is
per kettle, and the equilibrium quantity is
 kettles per month.
Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices.
PriceShortage or SurplusShortage or Surplus AmountPressure
(Dollars per kettle)(Kettles)
60    
    
40    
    

The equilibrium price in this market is$50per kettle, and the equilibrium quantity is250 kettles per month.Points:1 / 1Close ExplanationExplanation:The market equilibrium occurs at the price at which quantity demanded equals quantity supplied. In this case, the demand and supply curves intersec...

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Posted by Cleveland on August 30, 2024

11. Disequilibrium

Suppose the market for trucks is unregulated. In other words, the price of trucks can adjust freely based on supply and demand forces.
If a shortage exists in the truck market, then the current price must be    than the equilibrium price. For equilibrium to be reached in the market, you would expect    .

Suppose the market for trucks is unregulated. In other words, the price of trucks can adjust freely based on supply and demand forces.If a shortage exists in the truck market, then the current price must belower   than the equilibrium price. For equilibrium to be reached in the market, you...

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Posted by Cleveland on August 30, 2024

10. Market equilibrium

The following table presents the monthly demand and supply in the market for boots in San Francisco.
PriceQuantity DemandedQuantity Supplied
(Dollars per pair of boots)(Pairs of boots)(Pairs of boots)
201,100200
40900400
60800500
80600900
1005001,200
On the following graph, plot the demand for boots using the blue point (circle symbol). Next, plot the supply of boots using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for boots.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

The following table presents the monthly demand and supply in the market for boots in San Francisco.PriceQuantity DemandedQuantity Supplied(Dollars per pair of boots)(Pairs of boots)(Pairs of boots)201,1002004090040060800500806009001005001,200On the following graph, plot the demand for boots using t...

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Posted by Cleveland on August 30, 2024
The following graph plots the market for pizzas in Chicago, where you can assume there are always over 1,000 pizzerias. Suppose an innovation in the baking process makes it possible to produce more pizzas at a lower cost than ever before.
Show the effect of this change on the market for pizzas by shifting one or both of the curves on the following graph, holding all else constant.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.

Show the effect of this change on the market for pizzas by shifting one or both of the curves on the following graph, holding all else constant.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to ...

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Posted by Cleveland on August 30, 2024
he following graph plots the market for gyros in Detroit, where there are always over 1,000 gyro trucks. Suppose the price of french fries decreases. (Assume that people regard gyros and french fries as complements.)
Show the effect of this change on the market for gyros by shifting one or both of the curves on the following graph, holding all else constant.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.

The following graph plots the market for gyros in Detroit, where there are always over 1,000 gyro trucks. Suppose the price of french fries decreases. (Assume that people regard gyros and french fries as complements.)Show the effect of this change on the market for gyros by shifting one or both of t...

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Posted by Cleveland on August 30, 2024

8. Shifts in supply or demand I

The following graph plots the market for electric guitars in Detroit, where there are always over 1,000 music stores. Suppose the Surgeon General issues a public statement saying that consuming electric guitars is good for your health.
Show the effect of this change on the market for electric guitars by shifting one or both of the curves on the following graph, holding all else constant.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Now suppose Congress passes a tax cut that increases the income of Detroit residents.
If electric guitars are a normal good, this will cause the demand for electric guitars to    .

Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.Your AnswerDemandSupplyPRICE (Dollars per guitar)QUANTITY (Guitars)D1  D2 Su...

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Posted by Cleveland on August 30, 2024

Shifts in supply or demand I

The following graph plots the market for scones in Houston, where there are always over 1,000 bakeries. Suppose Houston experiences an unexpected flood of tourists due to a major conference.
Show the effect of this change on the market for scones by shifting one or both of the curves on the following graph, holding all else constant.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Now suppose Congress passes a new tax that decreases the income of Houston residents.
If scones are a normal good, this will cause the demand for scones to    .

Show the effect of this change on the market for scones by shifting one or both of the curves on the following graph, holding all else constant.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to ...

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Posted by Cleveland on August 30, 2024

7. Movements along versus shifts of supply curves

Consider the market supply of scones.
Complete the following table by indicating whether an event will cause a movement along the supply curve for scones or a shift of the supply curve for scones, holding everything else constant.
Event
Movement Along
Shift
An increase in the number of producers
A change in technology that makes it more costly to produce scones
A decrease in the price of scones

Complete the following table by indicating whether an event will cause a movement along the supply curve for scones or a shift of the supply curve for scones, holding everything else constant.EventMovement AlongShiftAn increase in the number of producersA change in technology tha...

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Posted by Cleveland on August 30, 2024

Individual and market supply

Suppose that Kevin and Maria are the only suppliers of bobblehead dolls in some hypothetical market. Their annual supply schedules are given by the following table:
PriceKevin's Quantity SuppliedMaria's Quantity Supplied
(Dollars per bobblehead)(Bobbleheads)(Bobbleheads)
206
4812
61216
81420
101622
On the following graph, plot Kevin's supply of bobblehead dolls using the green points (triangle symbol). Next, plot Maria's supply of bobblehead dolls using the purple points (diamond symbol). Finally, plot the market supply of bobblehead dolls using the orange points (square symbol).
Note: Line segments will automatically connect the points. Remember to plot from left to right.

Note: Line segments will automatically connect the points. Remember to plot from left to right.Your AnswerKevin’s SupplyMaria’s SupplyMarket Supply081624324048121086420PRICE (Dollars per bobblehead)QUANTITY (Bobbleheads)38, 10Correct AnswerPoints:1 / 1Close ExplanationExplanation:Each point on an in...

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Posted by Cleveland on August 30, 2024
Complete the following table by selecting the term that matches each definition.
Definition
Quantity Supplied
Supply Curve
Supply Schedule
Law of Supply
A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices
The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises
A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices
The amount of a good that sellers are willing and able to supply at a given price
Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology.
Your professor claims that one of the curves found on the following graph correctly illustrates the supply curve for records:
Because you understand the law of supply, you can deduce that the correct graphical representation of the supply for records must be    . Moreover, you know that at a price of $10 per record, the    is five million records.

Complete the following table by selecting the term that matches each definition.DefinitionQuantity SuppliedSupply CurveSupply ScheduleLaw of SupplyA table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various pricesThe claim ...

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Posted by Cleveland on August 30, 2024