Question

Evens only

Part 4. Economic Equations and Graphs 1. Price is $10, the quantity supplied is 50 units, and the quantity demanded is 100 units. For every $ 1 rise in price, the quantity supplied rises by 5 units and the quantity demanded falls by 5 units What is the equilibrium price and quantity? 4. In the following figure, can the movement from point 1 to point 2 be explained by a combination of an increase in the price of a substitute and a decrease in the price of non-labor resources ? Explain. Use the following figure to answer questions 2 and 3 below 5. The demand curve is downward sloping the supply curve is upward sloping: (a) Draw a diagram that shows a larger increase in demand than the increase in supply O A 1. --------191 -----3 / 10 20 30 40 (b) Draw a diagram that shows a smaller decrease in supply than the decrease in 2. In the above figure, at equilibrium, what areas) consumers' surplus? represent and what areas) represent producers' surplus ? 3. At what quantity in the preceding figure is the maximum buying price equal to the minimum selling price?

Answer 1

At price $10 , Qs = 50 and 9 a 2100 or $5 rise in price the Qs rises by (5x5) candy = 25 units and Qd dem sint rises by and Qd decreases by (5x5) unit = 25 units So, now Qs = (50+25) = 75 units and Qd = (100-25) = 75 cenits , both are equal So, at price $(20+5) = $15, 9 d = @s. price = $15 and 8 = 75 units 27 the At equilibrium, consumer surplus is = (A + B + C +D+E) and producer susphes = (f+l+H+ I+]) 37 At grantity 60 units the maximum I buying price - minimum selling price :

4 Yes, for a decrease in the price of non -labor resource, supply incomases as now, firms can supply more goods with lesser casts. and for an increase in the price of substitute, people noue demand more for this good so demand curve shifts to the right. so si go q 71