1. Given the following equations representing the behavior of producers and consumers:
Consumers: Qd = 120 – 10*PriceProducers: Qs = 10*PriceComplete the following table:Price Quantity Supplied Quantity Demanded Difference121086420
a. What price corresponds to the equilibrium price for this market:__________What is the equilibrium quantity?__________b. Over what range of prices does a Surplus result?______________c. Over what range of prices does a Shortage result?_____________d. If a surplus exists, explain the process by which market prices will adjust?__________________________________________________________________________________________________________________________________Will these prices adjust upwards or downwards?_____________________________________________________________________________________e. On the next page, graph the above price and quantity data and carefully label theSupply curve,Demand curve, Equilibrium price , and Equilibrium quantity.
|_______________________________________________________________________0 20 40 60 80 100 120 140 160 180 200 Quantity
2. Use arrows to describe an increase or decrease in equilibrium quantity (Qe) andequilibrium price (Pe) in the middle columns given the “events” described for thefollowing markets. If the resulting impact on price or quantity cannot be determined, usea question mark in place of arrows. In the last column, describe whether the event affectsthe supply-side, the demand-side of the market or both sides of the market. Be sure toconsider that the impact could be on both the demand and the supply sides.
Market Event Qe Pe Supply/Demand Side
A. Oranges Unexpectedly bad weather ____ ____ ____________destroys 20% of Florida’s orange crop:B. Raspberries Wages to farm workers increase: ____ ____ _____________C. Housing in The population increases and the ____ ____ _____________Denver share of housing increases as well:
D. Pepsi There is a decrease in Coke’s price: ____ ____ _____________E. Pepsi There is a decrease in Pepsi’s price: ____ ____ _____________