Macroeconomics

Problem 1: (30 points)

Price	Quantity Demanded	Quantity Supplied
$4.00	10000	8000
$8.00	8000	8000
$12.00	6000	8000
$16.00	4000	8000
$20.00	2000	8000

Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows:

a. Draw the demand and supply curves. What is unusual about this supply curve? Why might this be true? b. What are the equilibrium price and quantity of tickets? c. Your college plans to increase total enrollment next year by 5,000 students. The additional students will have the following demand schedule:

Price	Quantity Demanded
$4.00	4000
$8.00	3000
$12.00	2000
$16.00	1000
$20.00	0

What will be the new equilibrium price and quantity?

Problem 2: (30 points)

The market for pizza has the following demand and supply schedules:

Price	Quantity Demanded	Quantity Supplied
$4.00	135	26
$5.00	104	53
$6.00	81	81
$7.00	68	98
$8.00	53	110
$9.00	39	12

a. Graph the demand and supply curves. What is the equilibrium price and quantity in this market? b. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?

c. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?.

Problem 3: (20 points)

The average of price of Toyota is 4500 KD, the aberage price of Rolls Royce is 450000 KD. Use the Supply and Demand to Analyze why the price of these two cars are different.