Question

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1. What is the difference between Change in quantity demanded and Change in demand? 2. True or false? As the price of oranges rises, the demand for oranges falls, ceteris paribus. Explain your answer 3. With respect to each of the following changes, identify whether the demand curve will shit rightward or leftward: a An increase in income (The good under consideration is a normal good) b. A nse in the price of a substtute good C. A fall in the prce of a complementary good d.A fall in the number of buyers 4. What does a sale on shirts have to do with the law of demand (as applied to shirts)? 5. What is the difference between change in quantity supplied and Change in supply? 6. Predict what would happen to the equilibrium price of manjuana if it were legalized. 7 Compare the ratings for television shows with prices for goods. How are ratings like prices? How are ratings different from prices? (Hint How does rising demand for a particular television show manifest itsel?) 8. Must consumers' surplus equal producers' surplus at equilibrium price? Explain your answer 9. Many movie theaters charge a lower admission price for the first show on weekday aftemoons than they do for a weeknight or weekend show Explain why 10.A Dell computer is a substitute for a Hewlett Packard computer What happens to the demand for Hewlett Packard computers and the quantity demanded of Dell computers as the price of a Dell falls? Af equilibrium in a market, the maximum price buyers would be willing to pay for the good is equal to the minimum price sellers need to receve belore they are willing to sel the good Do you agree or disagree with this statement? Explain your answer 12 Descnbe how each of the following will alfect the dermand for personal computers (a) A nse in income (assuming computers are a nomal good) b) A lower expected price kor computers (c Cheaper software (d) Simpler-to-operate compulers 13. Descnbe how each of the following will affect the supply of personal computens (a) A rise in wage rates (b) An increase in the number of sellers of computers (C) A tax placed on the production of computers (d) A subsidy placed on the production of computers 14. Use the law of diminishing marginal utility to explain why demand curves skope downward 15. Explain how the market moves to equilibrium in terms of shortages and surpluses and in terms of maximum buying prices and minimum selling prices 16. Identify what happens to equilibrium price and quantity in each of the following cases (a) Demand rises, and supply is constant (b) Demand fals, and supply is constant (c) Supply rises, and demand is constant (d) Supply falls, and demand is constant e) Demand rises by the same amount that supply falls (0 Demand falls by the same amount that supply rises (g) Demand fals less than supply rises h) Demand nses more than supply rises 0 Demand rises less than supply rises 0 Demand falls more than supply falls k) Demand falls less than supply falls 17 When speeding tickets were $100, usually 500 speeders were on the roads each month in a given city, when ticket prces were raised to $250, usually 215 speeders were on the roads in the caity each month. Can you find any economics in this observation? 18 On most days, more people want to see the taping of The Tonight Show with Jay Leno (in Burbank, Califormia) than thore are seats in the taping studio. What micht exolain thinssh

Answer 1

Ans:1 Change in quantity demanded is caused by a change in price and results in a movement along the demand curve. Chang in demand is caused by other factors affecting demand and results in a shift of the demand curve.

Ans:2 True ( due to the law of demand, which states that there is an inverse relationship between price and quantity demanded, keeping other factors constant)

Ans:3 a. will shift the demand curve to the right; b.shift the demand curve to the right; c. shift the demand curve to the right; d. shift the demand curve to the left

Ans:4 if the price of shirts increases the demand for shirts will decrease, keeping other factors constant.

Ans:5 Change in quantity demanded is caused by a change in price and results in a movement along the demand curve. Chang in demand is caused by other factors affecting demand and results in a shift of the demand curve.

Ans:6 the price will fall and the demand will rise for marijuana

Ans:8 Yes, consumer surplus should be equal to producers surplus because the equilibirum price is set when the quantity demanded is equal to the quantity supplied.

Ans:9 Because the demand on Wednesday is low, so prices are set low to increase the demand.

Ans:10 as the price of Dell computer falls, people will start demanding the Dell computer and HP's demand will fall resulting in a leftward shift in the demand curve of HP computers.

Ans:11 No, this is incorrect. The equilibrium price is set when the supply is equal to the demand. and the difference between the equilibrium price and maxima of both supply and demand shows the producer and consumer surplus respectively.

Ans:12 a. will increase the demand; b. increase the demand; c. increase the demand; d. increase the demand

Ans:13a. decrease the supply; b. increase the supply; c.decrease the supply; d. increase the supply