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1. Apples and oranges are substitutes. A freeze in Florida destroys most of the orange crop.
What
would you expect to happen to the market (price and quantity) for each of the following:
(Hint: Use the demand curve and supply curve to draw conclusion with respect to the impact on the
price and quantity following the freeze).
a. Oranges?
b. Apples?
c. Orange juice?
2. Suppose market demand and supply are given by Qd = 30 - 3P and QS = 5 +2P.

a) Solve for the equilibrium price and quantity. Show your work!
b) Draw the demand and supply curve and show the equilibrium values obtained in part a)
Show Work!
3. In a competitive market, the market demand is Qd = 96 –10P and the market supply is Qs = 14p.
A price ceiling of $5 will result in a shortage of
36 units 24 units
16 units None of the above
Show your work! Using market demand and Market supply diagram!
4. Graphically, a report indicating the health defects from consuming extra ounces of whole grains
per day increases the chances of cancer by 30% will cause the demand curve for grains to:
a. Shift rightward c. Shift leftward
b. Become flatter d. Become steeper
Show your work using the tools of demand and supply curves!
5. Consumer surplus is the difference between the

a. Market price and the minimum price required to induce production
b. The maximum willingness to pay of consumers and the market price
c. Quantity demanded and the quantity supplied at the market price
d. Full economic price and the minimum price required to induce production
Show your work!
6.
a) What is scarcity? Can it be eliminated? Explain
b) Why does scarcity exist? How can it be resolved? Explain
c) Is there such a thing as a free lunch? Yes No. Explain
7. What is market equilibrium? Does the market always achieve equilibrium? If so, why? If not, why?
Explain. Illustrate with examples and graphs where necessary
8. The movement along a given demand curve is the same as a shift in the demand curve.
True False. Explain
9. If the income elasticity for designer jeans is 1.5, a 10% increase in income will lead to a
a. 15% rise in demand for designer jeans.
b. 0.15% drop in the demand for designer jeans.
c. 0.15% rise in demand for designer jeans.
Show your work
10. Which of the following increases the potential for sustainable long-run industry profits?
a. Entry. (Barriers to)
b. The availability of multiple substitutes.
c. Absence of complements.
11. If firms in the pizza industry are earning negative economic profits, which of the following will
most likely occur in the future?
a. Some firms will exit the market.
b. The economic profits of the firms in the industry will rise.
c. The market price for pizza will rise.
d. All of the responses are correct.
Explain your choice
Chapter 3: Problems
2. Use your knowledge of demand to answer each of the following.
a. How would a freeze in Florida affect the demand for oranges?
b. The price of coffee falls. How is the demand for coffee affected?
c. Income falls. How will this affect the demand for beans, an
inferior good?
d. How will a fall in the-price of peanut butter affect the demand
for jelly?
e. The media reports that red apples are sprayed with a substance
that allegedly causes cancer. What would be the likely effect of
this news on the demand for apples?
f. How would a major East Coast hurricane affect the demand
and supply of lumber in the affected area?
a. A freeze in Florida would cause a decrease in the supply of
oranges. This decrease in supply would lead to an increase in the
price of oranges, and hence an increase in the price of orange juice.
As the price of orange juice rises, there will be a decrease in quantity
demanded.
b. As the price of coffee falls, there will be an increase in quantity
demanded.
c. As income falls, there will be an increase in the demand for beaus.
d. Since peanut butter and jelly are complements, a fall in the price of
peanut butter will lead to an increase in the demand for jelly.
e. If the public is made aware that apples are being sprayed with a
cancer-causing agent, their preferences for apples will fall and their
will be a decrease in the demand for apples.
f. As rebuilding took place after the hurricane, the demand for lumber
would increase. The hurricane could destroy existing stocks of lumber
in the affected area. If this occurred, the supply of lumber would
temporarily decrease.
3. Briefly describe the difference between a change in quantity

supplied and a change in supply. What will cause each of these
changes to occur?
A change in quantity supplied means that sellers will be willing to sell

more (less) of a good at a new price. For example, ff price rises, the
seller will be willing to sell more of the product at the new higher
price. A change in supply means that sellers will be willing to sell
more (less) of a good at all possible prices. For example, before an
increase in supply, sellers were willing to sell 10 pizza slices at a
price of $1.00 per slice. Now they are willing to sell 15 pizza slices at
this same price. Change in quantity supplied is illustrated by a
movement along the supply curve while change in supply is
illustrated by a shift of the supply curve.
. Suppose that the government reduces the tariff on imported coffee, and at the same time, the
Health Ministry of publishes a reputable study indicating that coffee drinkers have lower rates of
colon cancer. What will the combined impact be on the equilibrium price and quantity of coffee?
Explain your reasoning and show it graphically
Lerato decided to start selling ginger beer on her street. The other kids in the
neighbourhood noticed that Lerato was making a lot of money selling ginger beer. These
kids decided to open their own ginger beer stands. When they opened their own ginger beer
stands, the equilibrium price
1． Draw the figure of the market equilibrium for the wheat market. Show what will happen
if pesticide cost increases.
2. Consider a consumer who has $100. The price for food is $1 /unit. The price
for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget
line when the consumer’s wealth increased to $200 and the price of clothing increased to
$4 /unit.
3. The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure
if the market price is 6. Calculate the consumer surplus again if the market price is 4.
Assume that the egg industry is perfectly competitive and is in long-run equilibrium with a
perfectly elastic long-run industry supply curve. Health concerns about cholesterol then lead
to a decrease in demand. Construct a figure similar to Figure 7-7 from your pdf text (page
263 of 698), showing the short-run behavior of the industry and how long-run equilibrium is
reestablished.
Assume that the full-employment income level is higher than the equilibrium income level. Full
employment can be reached if a)exports increase.
b)imports decrease.
c)the tax rate decreases.

اسئلة ايكو

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1. Apples and oranges are substitutes. A freeze in Florida destroys most of the orange crop.

2. Suppose market demand and supply are given by Qd = 30 - 3P and QS = 5 +2P.

5. Consumer surplus is the difference between the

3. Briefly describe the difference between a change in quantity

A change in quantity supplied means that sellers will be willing to sell

c)the tax rate decreases.

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