economics

m2_problem_sets.xlsx

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Module 2 Problem Sets

				Principles of Economics
				Name:
				Date:

Question #1

Equilibrium price is always determined by _____________________________________and __________________________________.

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Question #2

Shortages are associated with price ________________; surpluses are associated with price __________________________________.

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Question #3

If supply falls and demand remains the sam, equilibrium price wil _________________, and equilibrium quantity will _________________________.

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Question #4

Find the equilibrium price and quantity ( in units and dollars, respectfully.

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Question #5

Draw in a new supply curve S1, showing a decrease in supply. What happens to equilibrium price and quantity?

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Question #6

(a) Is $16 a price ceiling or price floor? (b) Is there a shortage or a surplus? (c) How much is in (in units of quantity)?

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Question #7

(a) Is $12 a price ceiling or price floor? (b) Is there a shortage or a surplus? ( c) How much (in units of quantity)?

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Question #8

(a). If the supply curve is S1, how much are equilibrium price and quantity? (b). If the supply changes from S1 to S2, does the represent an increase or decrease in supply? ( c). How much are the new equilibrium price and quantity?

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Question #9

A major technological improvement leads to a large decrease in the cost of production. Draw a new supply curve S2, to reflect this change. Then state the new equilibrium price and quantity.

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Question #10

(a) Draw a new demand curve, D2, which illustrates a decrease in demand. (b). State what happens to equilibrium price and quantity.

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Question #11

Show an increase in demand and a decrease in supply. (a) Label each of the curves (S1, S2, D1 and D2). (b). State the original equilibrium price and quantity. ( c) State the new equilibrium price and quantity.
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a.
b.
c.

Question #12

The entire orange crop in Florida is affected by a freeze. On the graph show how demand and supply are affected and show the new equilibrium price and quantity for a bushel of oranges.

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Question #13

There is an increase in demand of 25 units at each price. Draw a supply and demand curve and find the new equilibrium.

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Question #14

As price rises, quantity supplied _________________________.

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Question #15

An increase in supply is show graphically by a shift of the supply curve to the _________________________.

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