3. A recent study found that the demand and supply sche- dules for frisbees are as follows: Price per frisbee Quantity demanded Quantity supplied €11 1 million frisbees 15 million frisbees 10 2 12 4 6 7 8 6 10 1 What are the equilibrium price and quantity of frisbees? a. Frisbee manufacturers persuade the government that frisbee production improves scientists' understanding of aerodynamics and thus is important for national security. The government decides to impose a price floor €2 above the equilibrium price. What is the new market price? How many frisbees are sold? b. Irate university students march on the government and demand a reduction in the price of frisbees. The govern- ment decides to repeal the price floor and impose a price ceiling €1 below the former price floor. What is the new market price? How many frisbees are sold?

3. A recent study found that the demand and supply sche- dules for frisbees are as follows: Price per frisbee Quantity demanded Quantity supplied €11 1 million frisbees 15 million frisbees 10 2 12 4 6 7 8 6 10 1 What are the equilibrium price and quantity of frisbees? a. Frisbee manufacturers persuade the government that frisbee production improves scientists' understanding of aerodynamics and thus is important for national security. The government decides to impose a price floor €2 above the equilibrium price. What is the new market price? How many frisbees are sold? b. Irate university students march on the government and demand a reduction in the price of frisbees. The govern- ment decides to repeal the price floor and impose a price ceiling €1 below the former price floor. What is the new market price? How many frisbees are sold?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

How does a price floor 521 above the equilibrium level affect quantity demanded and quantity1 supplied?
What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?
Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.
Suppose there is a soda tax to curb obesity. What should a reduction in the soda tax do to the supply of sodas and to the equilibrium price and quantity? Canyon show this graphically? Hint: Assume that the soda tax is collected from the sellers.
What is consumer surplus? How is it illustrated on a demand and supply diagram?
How can you locate the equilibrium point on a demand and supply graph?
The following table summarizes information about the market for principles of economics textbooks: Price Quantity Demanded per Year Quantity Supplied per Year $45 4,300 300 55 2,300 700 65 1,300 1,300 75 800 2,100 85 650 3,100 What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.
Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. What is the quantity demanded and the quantity supplied at a price of 210? At what price is the quantity supplied equal to 48,000? Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from line table? What HIE die equilibrium price and equilibrium quantity? If the price was 120, what would the quantities demanded and supplied he? Would a shortage or surplus exist? If so, how large would the shortage or surplus he?
Select the correct answer. A price floor will usually shift: demand supply both neither Illustrate your answer with a diagram.
Table 3.9 illustrates the markets demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. A new study says that eating cheese is good for your health, so that demand increases by 20 at every price.
What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of a price ceiling on the quantity supplied? Why exactly does a price ceiling cause a shortage?
Does a price floor attempt to make a price higher or lower?