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You are encouraged to work on these exercises during your designated recitation. During that time, you
will work through these problems in small groups with several of your peers. Your TA will be available to
answer your questions and provide guidance. document and upload that document to Gradescope by
11:55pm on Thursday, February 4th. We will accept group submissions where the group is no more than
4 people, but please make sure that you follow these directions when you upload your assignment to
Gradescope (https://help.gradescope.com/article/m5qz2xsnjy). For more information on how to submit
homework to Gradescope and other frequently asked questions, follow this link
These activities are designed to give you a deeper understanding of course concepts and they will be
graded for completion (100%, i.e., you must answer every part to every question) and accuracy (60% or
better). You must reach those targets to receive credit (1 point), otherwise you get no credit (0 points).
1. The table below displays the amount that three different consumers are willing and able to pay
for three oranges in a given day. Use this information to answer the questions that follow.
Second Orange Third Orange
a. If the market price of an orange is $0.75, the market quantity of oranges demanded per day
is ____ and the value of consumer surplus is _____.
b. If the market price of an orange increases from $0.75 to $1.00, will consumer surplus
increase or decrease? By how much? (insert a monetary value and show your work).
2. The table below represents the value that 4 students place on a used economics textbook.
Assume that each student is only interested in buying one textbook.
B e Val e
Use the information provided to complete the demand schedule given below. Assume buyers
will purchase a textbook whenever they are indifferent. Use the information in the demand
schedule to draw the demand curve for used economics textbooks. Make sure you label both
3. Below are 5 students, each of whom owns a used economics textbook. Next to each student is
the value that the student puts on their textbook.
Use the information provided to complete the supply schedule below. Assume the students will
sell their textbook whenever they are indifferent. Draw the supply curve for the used
economics textbook market. Make sure you label both axes.
Given the supply and demand schedules in problems 2 and 3, what is the equilibrium price and
the equilibrium quantity of used economic textbooks? Assume that when indifferent, the
student will buy or sell.
4. During the COVID-19 pandemic, beer and soda consumption shifted from restaurants to homes
and beverage companies and can-makers had a hard time keeping up because they were not
ready for drink consumption to go from tap to the home. A Coca-Cola spokesperson said,
Al min m can a e in e igh ppl i h o man people b ing mo e m l ipack products
o con me a home (Bomey, N. (2020, July 16). Another shortage! Beer, soda makers struggle
with aluminum can supply, plan to limit niche drinks. USA Today.)
a. Draw the market for aluminum cans before the pandemic. Label the equilibrium price
and quantity (Q0, P0).
b. Now add to the graph in part a) the impact that the pandemic had on the market for
aluminum cans, i.e., was there initially a change in supply or a change in demand?
Identify the new equilibrium price and quantity in the market for aluminum cans (Q1,
c. Over the summer, aluminum can manufacturers announced plans to build at least three
factories within 18 months. How will this information affect the price and quantity in
the market for aluminum cans? Draw a new supply and demand graph and label the
initial equilibrium price and quantity (Q0, P0). On your graph, show the impact that the
new factories will have on the equilibrium price and quantity in the market for
aluminum cans (Q1, P1).
d. In this part of the question, we want you to compare the price and quantity of
aluminum cans pre-pandemic to the price and quantity of aluminum cans after the
pandemic hit and the 3 factories were built, i.e., you are going to analyze collectively
parts a), b), and c). Do you expect the price of aluminum cans to be higher or lower
after the factories are built? Explain. What do you expect to happen to the quantity of
aluminum cans after the factory is built? Explain. Feel free to draw a graph to support