timer Asked: Nov 6th, 2016

Question description

Complete this...

  1. 1. Draw a demand curve from the following demand table on the axes below. Label it D1. Then suppose the demander gets an increase in income and decides to buy 2 more bars at every price level. Draw this change on your demand curve. Label it D2.
    Price per candy barCandy bars purchased each week
    2. Indicate whether each of the following statements describes an increase in demand, decrease in demand, change in quantity demanded, increase in supply, decrease in supply, or change in quantity supplied in the given market.a. Store-brand soup prices are cut, reducing sales of Campbell’s soup. Market: Campbell’s soup. b. Coffee bean prices hit an 18-month low following a bountiful harvest. Market: coffee beans.c. A summer heat wave leads to higher prices for bottled water. Market: bottled water. d. Holiday clothing discounts boost clothing sales. Market: clothing. e. Apple introduces a tinier and more powerful iPod model. Market: older iPod models.f. The cost of pesticides increases, leading to a rise in the price of soy beans. Market: soy beans.3. Given the following data for individuals, draw the market demand curve and market supply curve for CDs. Assume that these are the only individuals in the entire market. Price is per CD.
    Price $8.00$8.50$9.00$9.50$10.00$10.50
    Quantity demanded in units per week
    Quantity supplied in units per week
    1. What would be the equilibrium price and quantity in this market?
    2. Which would there be—excess demand or excess supply—at a price of $8.00? How much? What about at a price of $10.00?
    3. If the price of a CD was initially set at $9.00 but the price was allowed to adjust, would the price rise or fall? Explain your answer.

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