Economics

David C. Colander

Chapter 4 Supply and Demand - all with Video Answers

Educators

Chapter Questions

07:24

Problem 1

State the law of demand. Why is price inversely related to quantity demanded?

Ansh Varma

Numerade Educator

01:01

You're given the following individual demand tables for comic books.
a. Determine the market demand table.
b. Graph the individual and market demand curves.
c. If the current market price is $$\$ 4,$$ what's total market demand? What happens to total market demand if price rises to $$\$ 8 ?$$
d. Say that an advertising campaign increases demand by 50 percent. What will happen to the individual and market demand curves?

Abby Kennedy

Numerade Educator

03:49

Problem 3

List four shift factors of demand and explain how each affects demand.

Daniel Cisneros

Numerade Educator

07:31

Problem 4

Distinguish the effect of a shift factor of demand on the demand curve from the effect of a change in price on the demand curve. $(L O 4-I)$

Ansh Varma

Numerade Educator

05:20

Problem 5

State the law of supply. Why is price directly related to quantity supplied?

Ansh Varma

Numerade Educator

03:37

Problem 6

Mary has just stated that normally, as price rises, supply will increase. Her teacher grimaces. Why?

Jennifer Stoner

Numerade Educator

03:05

Problem 7

List four shift factors of supply and explain how each affects supply.

Daniel Cisneros

Numerade Educator

02:45

Problem 8

Derive the market supply curve from the following two individual supply curves.

Lindsay Bur

Numerade Educator

01:53

Problem 9

You're given the following demand and supply tables:
a. Draw the market demand and market supply curves.
b. What is excess supply/demand at price $\$ 30 ?$ Price $\$ 60 ?$
c. Label equilibrium price and quantity.

Crystal Wang

Numerade Educator

03:07

Problem 10

It has just been reported that eating red meat is bad for your health. Using supply and demand curves, demonstrate the report's likely effect on the equilibrium price and quantity of steak sold in the market.

Heather Duong

Numerade Educator

View

Problem 11

Why does the price of airline tickets rise during the summer months? Demonstrate your answer graphically.

James Kiss

Numerade Educator

02:55

Problem 12

Why does sales volume rise during weeks when states suspend taxes on sales by retailers? Demonstrate your answer graphically assuming that the retailer pays the $\operatorname{tax}$

Md.Daniyal Arshad

Numerade Educator

01:25

Problem 13

What is the expected impact of increased security measures imposed by the federal government on airline fares and volume of travel? Demonstrate your answer graphically.

Breanna Ollech

Numerade Educator

00:54

Problem 14

Explain what a sudden popularity of "Economics Professor" brand casual wear would likely do to prices of that brand.

Omkar Katta

Numerade Educator

03:13

Problem 15

In a flood, usable water supplies ironically tend to decline because the pumps and water lines are damaged. What will a flood likely do to prices of bottled water?

Danielle Ashley

Numerade Educator

03:55

Problem 16

OPEC announces it will increase oil production by 20 percent. What is the effect on the price of oil? Demonstrate your answer graphically.

Yang Su

Numerade Educator

02:35

Problem 17

Draw hypothetical supply and demand curves for tea. Show how the equilibrium price and quantity will be affected by each of the following occurrences:
a. Bad weather wreaks havoc with the tea crop.
b. A medical report implying tea is bad for your health is published.
c. A technological innovation lowers the cost of producing tea.
d. Consumers' income falls. (Assume tea is a normal good.)

Crystal Wang

Numerade Educator

12:39

Problem 18

You're a commodity trader and you've just heard a report that the winter wheat harvest will be 2 billion bushels, a 40 percent jump, rather than an expected 30 percent jump.
a. What would you expect would happen to wheat prices?
b. Demonstrate graphically the effect you suggested in part $a$.

Oluwadamilola Ameobi

Numerade Educator

03:13

Problem 19

In the United States, say gasoline costs consumers about $$\$ 2.50$$ per gallon. In Italy, say it costs consumers about $$\$ 6$$ per gallon. What effect does this price differential likely have on:
a. The size of cars in the United States and in Italy?
b. The use of public transportation in the United States and in Italy?
c. The fuel efficiency of cars in the United States and in Italy?
d. What would be the effect of raising the price of gasoline in the United States to $$\$ 5$$ per gallon?

Jennifer Stoner

Numerade Educator

02:10

Problem 20

Assume that Argentina imposes a 20 percent tax on natural gas exports.
a. Demonstrate the likely effect of that tax on gas exports using supply and demand curves.
b. What does it likely do to the price of natural gas in Argentina?

Andrew Davis

Numerade Educator

01:07

Problem 21

In most developing countries, there are long lines of taxis at airports, and these taxis often wait two or three hours. What does this tell you about the price in that market? Demonstrate with supply and demand analysis.

Achintya Suden

Numerade Educator

01:05

Problem 22

Define the fallacy of composition. How does it affect the supply/demand model?

Arrushi Agarwal

Numerade Educator

01:45

Problem 23

In which of the following three markets are there likely to be the greatest feedback effects: market for housing, market for wheat, market for manufactured goods?

Kaylee Mcclellan

Numerade Educator

09:25

Problem 24

State whether "other things constant" is likely to hold in the following supply/demand analyses:
a. The impact of an increase in the demand for pencils on the price of pencils.
b. The impact of an increase in the supply of labor on the quantity of labor demanded.
c. The impact of an increase in aggregate savings on aggregate expenditures.
d. The impact of a new method of producing CDs on the price of CDs.

Ansh Varma

Numerade Educator