Question 1:
Given the following Supply & Demand Schedule, illustrate, interpret, and determine the market equilibrium, price, and quantity.
| Quantity Demanded |
Quantity Supplied |
Price |
| 200 |
20 |
5 |
| 180 |
40 |
10 |
| 160 |
60 |
15 |
| 140 |
80 |
20 |
| 120 |
100 |
25 |
| 100 |
120 |
30 |
| 80 |
140 |
35 |
| 60 |
160 |
40 |
| 40 |
180 |
45 |
| 20 |
200 |
50 |
Question 2:
The demand curve is Qd = 120-p, and the supply curve is Qs = 40+5p. What are the equilibrium price and quantity? Please illustrate.
Question 3:
Using the following demand schedule, interpret the direction, the demand curve would shift based upon the following scenarios:
| Demand |
Price |
| 500 |
10 |
| 450 |
20 |
| 400 |
30 |
| 350 |
40 |
| 300 |
50 |
| 250 |
60 |
| 200 |
70 |
| 150 |
80 |
a. The price of gasoline drops, how does this affect consumer demand?
b. Apple's introduction of their newest iPhone, how does this affect consumer demand?
c. The cost of private post-secondary education increases, how does this affect consumer demand?
d. Unemployment increases, how does this affect consumer demand for housing?
Question 4:
Explain using a supply and demand curve the effects of an increase in minimum wage. According to U.S. Department of Labor, effective July 24, 2009, the national minium wage was $7.25/hour; therefore, research the current minimum wage rate on the labor market, identify the number of workers in the labor force in July 2009 and October 2014 to illustrate your conclusions.
Question 5:
In Anywhere, USA, the demand function of a gym membership is Qd = 600-50p+ 0.6Y. Where Qd is quantity demand per month, p is the price of a membership, and Y is the average monthly income in the town. The supply function of gym memberships is Qs =100+20p -20w, where Qs is the number of memberships and w is the average hourly wage of trainers.
a. If Y=$5000 and w = $10, use Excel to calculate quantity demanded and quantity supplied for p=5, 10, 15, 20, 25, 30, 35, 40. Determine excess shortages or surpluses.Use Excel to illustrate the supply and demand curves.
b. Assume Y increases to $6875 and w increases to $15. Use Excel to recalculate quantity demanded and quantity supplied for p=5, 10, 15, 20, 25, 30, 35, 40.Illustrate supply and demand curves. Explain the change in equilibrium.
Question 6:
The price elasticity of demand is 0.8, calculate the percentage change in quantity demand if the price of cigarettes per pack rose from $5.50 to $6.50.
Use the formula for Price Elasticity of Demand.
Question 7:
Calculate the price elasticity of demand given a 20% increase in price and 40% decrease in quantity demanded.
Would the good be considered as elastic, unitarily elastic, or inelastic in demand? Please explain.
Use the price elasticity of demand formula.
Question 8:
A local movie theater owner decided to increase his ticket prices from $8.50 to $10.00, as a result the quantity of ticket sold per week as decreased from 1,000 ticket to 800 tickets, calculate the price elasticity of demand using the point elasticity of demand formula. Do consumers have an elastic, inelastic, or unitarily elastic demand for theater tickets? Please explain.
Question 9:
The marketing department of Acme Inc. has estimated the following demand function for it Febreze Car Vent Clip Air Freshener, 1-count: Q = 200-5p,where Q is the quantity (sold in thousand units) and p is the price for one (1) Febreze Care Vent Clip Air Freshener. Using Excel, calculate the point price elasticity of demand, ε, for price, p = 1, 2, 3....., 20.
Describe the pattern of price elasticity of demand that you have calculated along the demand curve.
Attachment:- Problem Sets.xlsx