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    03 - Prob Set - SS and DD

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    Ishmam
    This document contains 6 multiple choice or short answer problems about microeconomics concepts like demand, supply, substitutes, and equilibrium. Problem 1 asks about the effect of an increase in the price of plastic on steel demand. Problems 2-4 are multiple choice questions testing supply and demand curve shifts. Problems 5-6 involve graphically illustrating changes in demand/supply and their effects on equilibrium price and quantity.

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    03 - Prob Set - SS and DD

    Uploaded by

    Ishmam
    53 views7 pages
    This document contains 6 multiple choice or short answer problems about microeconomics concepts like demand, supply, substitutes, and equilibrium. Problem 1 asks about the effect of an increase in the price of plastic on steel demand. Problems 2-4 are multiple choice questions testing supply and demand curve shifts. Problems 5-6 involve graphically illustrating changes in demand/supply and their effects on equilibrium price and quantity.

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    03 - prob set - SS and DD

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    This document contains 6 multiple choice or short answer problems about microeconomics concepts like demand, supply, substitutes, and equilibrium. Problem 1 asks about the effect of an increase in the price of plastic on steel demand. Problems 2-4 are multiple choice questions testing supply and demand curve shifts. Problems 5-6 involve graphically illustrating changes in demand/supply and their effects on equilibrium price and quantity.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    53 views7 pages

    03 - Prob Set - SS and DD

    Uploaded by

    Ishmam
    This document contains 6 multiple choice or short answer problems about microeconomics concepts like demand, supply, substitutes, and equilibrium. Problem 1 asks about the effect of an increase in the price of plastic on steel demand. Problems 2-4 are multiple choice questions testing supply and demand curve shifts. Problems 5-6 involve graphically illustrating changes in demand/supply and their effects on equilibrium price and quantity.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 7

    Chapter 3

    SS & DD
    Problem set
    Problem 1
    • Plastic and steel are substitutes in the
    production of body panels for certain
    automobiles. If the price of plastic increases,
    with other things remaining the same, we would
    expect
    A. the price of steel to fall.
    B. the demand curve for steel to shift to the right.
    C. the demand curve for plastic to shift to the left.
    D. nothing to happen to steel because it is only a
    substitute for plastic.
    E. the demand curve for steel to shift to the left.
    Problem 2
    Which of the following would cause a shift to the
    right of the supply curve for gasoline?
    I. A large increase in the price of public
    transportation.
    II. A large decrease in the price of automobiles.
    III. A large reduction in the costs of producing
    gasoline.
    A. I only.
    B. II only.
    C. III only.
    D. d.II and III only.
    Problem 3
    • Consider the demand curve of the form
    Q = a - bP. If a is a positive real number,
    and b = 0, then demand is
    A. completely inelastic.
    B. inelastic, but not completely.
    C. unit elastic.
    D. elastic, but not infinitely.
    Problem 4
    • From 1970 to 1993, the real price of eggs
    decreased. Which of the following would cause an
    unambiguous decrease in the real price of eggs?
    A. A shift to the right in the supply curve for eggs and
    a shift to the right in the demand curve for eggs.
    B. A shift to the right in the supply curve for eggs and
    a shift to the left in the demand curve for eggs.
    C. A shift to the left in the supply curve for eggs and a
    shift to the right in the demand curve for eggs.
    D. A shift to the left in the supply curve for eggs and a
    shift to the left in the demand curve for eggs.
    Problem 5
    a. What is the difference between a "change in
    demand" and a "change in quantity demanded?"
    Graph your answer.
    b. For each of the following changes, determine
    whether there will be a change in quantity
    demanded or a change in demand. 
    i. A change in the price of a related good  
    ii. a change in tastes  
    iii. a change in the number of buyers  
    iv. a change in price  
    v. a change in consumer expectations  
    vi. a change in income 
    Problem 6
    • Suppose we are analyzing the market for coffee.
    Graphically illustrate the impact each of the following would
    have on demand or supply. Also show how equilibrium price
    and equilibrium quantity would change. 
    i. The price of tea falls.
    ii. A better method of harvesting coffee beans is introduced.
    iii. A few research articles published say that coffee improve
    health.
    iv. Consumer income falls because of a recession, and
    coffee is considered a normal good.
    v. Producers expect the price of coffee to increase next
    month.

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