Exam 2: Supply and Demand

-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

Explain why short-run demand for frozen fish sticks may be more price elastic in the short run than in the long run.

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for computer manuals after technological advances in making computers occur?

If the government levies a specific tax on tobacco producers,the spending of consumers will probably

The supply and demand for wheat is given by QS = 200 + .2A + p and QD = 500 - p,where p is the price of wheat and A is the amount of rainfall (inches per year).The effect of an incremental increase in rainfall on equilibrium will be

Use a supply-and-demand graph to predict what happens to sheet steel prices in the United States after quotas on Japanese and European sheet steel expire.

The California cigarette market consists of the following supply and demand curves: QD = 150 - 20p QS = 40p where Q is the number of packs of cigarettes per year (in millions!),and p is the price per pack. a.Compute the market equilibrium price and quantity. b.Calculate the price elasticities of each curve at the equilibrium price/quantity. c.California imposes a tax on cigarettes of $0.90 per pack.Suppliers pay this tax to the government.Compute the after-tax price and quantity.How much do suppliers receive net of tax (per pack)? d.Demand for cigarettes is generally more elastic over longer periods of time as consumers have more time to kick the habit.What does this imply about the tax incidence in the long run as compared to the short run?

The percentage change in the quantity demanded in response to a percentage change in the price is known as the

Suppose the demand for pork is given by the equation Q = p⁻⁰.⁵pc⁰.² where pc is the price of chicken.Compute the cross-price elasticity of demand for pork

-The above figure shows a graph of a market for pizzas in a large town.At a price of $10,the market

Suppose the supply curve and the demand curve both have unitary elasticity at all prices.The price increase to consumers resulting from a specific tax of $1 imposed on sellers will be

Suppose the market for potatoes can be expressed as follows: Supply: Qˢ = -20 + 10p Demand: Qᴰ = 400 - 20p Solve for the equilibrium price and quantity.

For the following, please answer "True" or "False" and explain why. -If a linear supply curve has a zero intercept,the elasticity of supply is always unitary.

Suppose that the current price of oil is $60 per barrel and the quantity sold is 90 million barrels per day.The current estimates of the price elasticity of supply and demand are η=1 and ε=-.2 respectively. a.Compute linear equations for the supply and demand. b.What will be the effects on the market price and quantity if the U.S.government suddenly decides to purchase an additional 2 million barrels of oil? Assume that the addition consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day.

The U.S.government imposes a number of import quotas on dairy products,including Swiss cheese.The domestic supply of Swiss cheese is given by: Qᴰᵒᵐ ⁼ 250p - 1000 The supply of Swiss cheese from foreign producers to the U.S.(mostly from Switzerland,of course),is given by: Qᶠᵒʳ ⁼ 1125p - 4500 In both equations above,Q is the quantity of cheese (100's of lbs/month),and p is the price per pound. a.Using the equations above,derive the total supply of cheese equation to the U.S.in the absence of any quota. Suppose that fears of neutral countries (like Switzerland)spark the U.S.to restrict imports of Swiss cheese to Q = 9000. b.On a graph,draw (i)the domestic,(ii)foreign and (iii)total supply with the quota.

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

A vertical demand curve for a particular good implies that consumers are

If the supply curve of cigarettes shifts to the left,quantity demanded for cigarettes

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is