Exam 15: Equilibrium

The demand function for abalone is q = 30 - 9p and the supply function is q = 6p. Suddenly the yuppies discover abalone. The quantity demanded at every price doubles. The supply function, however, remains the same as before. What is the effect on the equilibrium price and quantity?

The demand function for x is D(p) = 65 - 2p and the supply function is S(p) = 20 + p. The price that should be set to restrict the quantity supplied to 30 units is closest to

The demand curve for rutabagas is a straight line with slope 26 and the supply curve is a straight line with slope 2. Suppose that a new tax of $3 per sack of rutabagas is introduced.

The price elasticity of demand for a certain agricultural product is constant (over the relevant range of prices) and equal to -2. The supply elasticity for this product is constant and equal to 3. Originally the equilibrium price of this good was $45 per unit. Then it was discovered that consumption of this product was unhealthy. The quantity that would be demanded at any price fell by 100%. The percent change in the long-run equilibrium consumption of this good was

The inverse demand function for eggs is p = 84 - 9q, where q is the number of cases of eggs. The inverse supply is p = 7 + 2q. In the past, eggs were not taxed, but now a tax of 33 dollars per case has been introduced. What is the effect of the tax on the quantity of eggs supplied?

Daily demand for gasoline at Billy-Bob's Mobile Station is described by Q = 980 - 300p, where Q are gallons of gasoline sold and p is the price in dollars. Billy-Bob's supply is Q = 22,980 + 3,000p. Suppose the state government places a tax of 18 cents on every gallon of gasoline sold. What is the deadweight loss resulting from this tax?

Use supply and demand analysis to examine the following statement: "The practice of giving food stamps is self-defeating. Food stamps effectively lower the price of food. When food becomes available at lower prices, demand will increase thereby forcing the price up to its initial level." Is this reasoning correct? Draw supply and demand curves to illustrate your answer.

The demand function for fresh strawberries is q = 200 - 5p and the supply function is q = 60 + 2p. What is the equilibrium price?