Exam 3: A: - Demand, Supply, and Market Equilibrium

Explain how the prices of related goods also affect demand.

State the law of demand and explain why the other-things-equal assumption is critical to it.

Use the data in the following table to explain the economic effects of a price floor at $8, at $9, and at $10.Explain the economic effects.

Describe in words how one can recognize the market equilibrium point in a graph of a demand schedule and a supply schedule.

What effect will each of the following have upon the supply of television sets? Explain your reasoning in each case.(a) an increase in the price of electronic equipment used in producing television sets (b) a decline in the number of firms producing television sets (c) a large new tariff on imported Japanese TV sets (d) new inexpensive satellite dishes which make televisions more popular among consumers

In the spaces below each of the following, indicate the [increase (+), decrease (-), or indeterminate (ind)] on equilibrium price (P) and equilibrium quantity (Q) of each of these changes in demand and/or supply.

Use the data in the following table to explain the economic effects of a price ceiling at $9.

The Federal government is considering passing an excise tax that would increase the price of a pack of cigarettes by $1.00.What would be the likely effect of this change on the demand and supply of cigarettes? What is likely to happen to cigarette prices and the quantity consumed if the tax bill is enacted?

What are the consequences for equilibrium price and quantity if there is an equal increase in the supply and demand for sushi?

Evaluate.An increase in demand causes price to rise which, in turn, causes demand to fall.Therefore, an increase in demand will not have lasting effects.

Evaluate.A decrease in supply causes price to rise which, in turn, causes supply to rise.Therefore, a decrease in supply will not have lasting effects.