Exam 5: Supply,demand,and Price: Applications

The price of good X has a pattern such that P = $3 on Monday through Thursday of every week,and P = $2 on Fridays.If speculators begin participating in the market for good X,their actions will likely lead to a(n)______________ in the price of good X on Monday through Thursday and a(n)_______________ in the price of good X on Friday.

The price of good B has a pattern such that P = $20 on Monday through Thursday of every week,and P = $25 on Fridays.If speculators begin participating in the market for good B,their actions will likely lead to a(n)______________ in the price of good B on Monday through Thursday and a(n)_______________ in the price of good B on Friday.

When congestion occurs on the freeway (because of a shortage of freeway space),the economist would most likely explain this by saying that it is because

Exhibit 5-3 -Refer to Exhibit 5-3 which shows the demand and supply of a college athlete.Suppose that NCAA rules limit the amount that the college can pay this athlete,such that their payment can not exceed the cost of attending the college (currently $8,000).The impact of this ruling would be a loss of income to the athlete of __________ and an equal gain in consumers' surplus to the college represented by ________________.

Exhibit 5-3 -Refer to Exhibit 5-3 which shows the demand and supply of a college athlete.Suppose that NCAA rules limit the amount that the college can pay this athlete,such that their payment can not exceed the cost of attending the college (currently,$8,000).What is the consumers' surplus for the college (with respect to this one athlete)?

As the price of good Z falls,the quantity demanded of good Z rises,but the quantity supplied of good Z does not change.Based upon this information we can conclude that the demand curve for good Z is ________________ and the supply curve for good Z is ________________.