Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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Question
Chapter 4, Problem 8TY
To determine
(a)
To discuss the effect of tax levied on the sale of beef.
To determine
(b)
To discuss the effect of tax levied on sale of beef.
To determine
(c)
To discuss the effect of tax levied on the sale of beef.
To determine
(d)
To discuss the effect of tax levied on the sale of beef.
To determine
(e)
To discuss the effect of tax levied on the sale of beef.
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10. Market equilibrium
The following table shows the monthly demand and supply in the market for shoes in Dallas.
Price
Quantity Demanded
Quantity Supplied
(Dollars per pair of shoes)
(Pairs of shoes)
(Pairs of shoes)
20
1,100
200
40
900
400
60
800
500
80
600
900
100
500
1,200
On the following graph, plot the demand for shoes using the blue point (circle symbol). Next, plot the supply of shoes using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for shoes.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
DemandSupplyEquilibrium020040060080010001200120100806040200PRICE (Dollars per pair of shoes)QUANTITY (Pairs of shoes)
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The demand and supply for a particular commodity are given by the following two equations:
Demand: P = 8 – 0.2Qd
and
Supply: P = 6 + 0.2Qs
Where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price.
Using the equilibrium condition Qs = Qd, determine equilibrium price and equilibrium quantity.
Equilibrium price = $ _____
Equilibrium quantity = _____ units
Suppose the quantity demanded rises by 20 million pounds of coffee per month at each price. Draw the initial demand and supply curves based on the values given in the table above. Then draw the new demand curve given by this change, and show the new equilibrium price and quantity.
Chapter 4 Solutions
Microeconomics: Principles & Policy
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- Draw a demand and supply graph for each of the following questions. For each question, start by drawing a correctly labeled graph of the market for cookies in equilibrium. Your starting graphs should each have correctly labeled axes and demand and supply curves. Label the equilibrium price and quantity as p1 and p2 on the axes of each of the starting graphs. Show the effect on the equilibrium price and quantity in the market for cookies if the price of milk increases. Determine which curve is affected by the change in the price of milk and whether it increases or decreases. On your graph, draw a new curve indicating the shift—either to the right or the left. Label the new equilibrium price and quantity as p2 and q2. Show the effect on the equilibrium price and quantity in the market for cookies if the price of flour decreases. Determine which curve is affected by the change in the price of flour and whether it increases or decreases. On your graph, draw a new curve indicating the…arrow_forwardConsider the following: If the price per unit of good A is P175 quantity purchased is valued at 5,250 units and quantity supplied equals 2,500 units. If price changes by P1, quantity demanded changes by 4 units for consumer demand and quantity supplied changes by 2 units. Graph demand and supply curves on one set of axes and highlight the following: price intercepts of demand and supply curves, quantity-intercepts of demand and supply curves, and the equilibrium point. (Make sure to LABEL your graph accordingly.)arrow_forwardShow in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events. The market for steel in the United States: Fuel efficiency regulations have reduced the use of steel in automobile production and increased the use of lighter materials such as aluminum AND import restrictions limit the amount of steel that can be imported into the United States. The market for international airline tickets: Incomes decline due to a recession AND Norwegian Airlines adds more U.S. cities to its list of international flight destinations.arrow_forward
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