Exam 2: Supply and Demand

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

In the case of a specific tax,tax incidence is independent of who pays

An increase in consumer incomes will lead to

The tax incidence of a specific tax or ad valorem tax is influenced by

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

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

What happens to the equilibrium price and quantity of coffee when there is a leftward shift of the supply curve for tea? Explain.

Assume the market demand for wheat may be written as Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley.Assuming that wheat and barley both sell for $1,and income is $20,calculate the price elasticity,cross price elasticity and income elasticity for wheat.

Technological innovation in the production of computers has led to

The quantity of a good that consumers demand depends only on the price of the good.

-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 bad weather causes the supply curves in each country to shift leftward by the same amount,then

The benefit of a subsidy paid on each unit sold will go entirely to the sellers in the market if

The price elasticity of supply when the supply curve is Q = 5 is

The market demand for wheat is Q = 100 - 2p + 1 ,where Is the price of barley.If the price of wheat is $2,the price elasticity of demand

Suppose the market for potatoes can be expressed as follows: Supply: Q^S = -20 + 10p Demand: Q^D = 400 - 20p If the government sets a maximum price of $10 per unit,what will be the quantity demanded and quantity supplied?

-The above figure shows the market for crude oil.If a consumer group convinces the government to set a maximum price of $2 per barrel,then

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.

Suppose the market for grass seed can be expressed as: Demand: Q_D = 100 - 2p Supply: Q_S = 3p If government imposes a 10% ad valorem tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected?

Suppose the market for grass seed can be expressed as: Demand: Q_D = 200 - 5p Supply: Q_S = 40 + 5p If the government collects a $5 specific tax from sellers,how much will the quantity demanded change from the amount demanded before the tax? What price will consumers pay after the tax? What price will sellers receive after the tax? What is the tax revenue?

The U.S.is planning on imposing quotas on tires imported from china.Domestic retailers predict this will result in an increase in consumer prices on tires by about $10.Use a supply and demand graph with brief explanation to show the effects of an import quota.Assume the quota is binding.