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Basic Supply and Demand

# Basic Supply and Demand - Name Section 1 If the price of...

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Unformatted text preview: Name __________________________________ Section _________________ 1). If the price of the product is \$20, then the Quantity Demanded is _________________ and the Quantity supplied is _________________ and there is an Excess Supply / Demand of _________________ 2). If the price of the product is \$50, then the Quantity Demanded is _________________ and the Quantity supplied is _________________ and there is an Excess Supply / Demand of _________________ 3). The change in price from \$20 to \$50 resulted in a change in Demand / Quantity Demanded of _________________ and a change in Supply / Quantity Supplied of _________________ 4). The Equilibrium values of Price and Quantity are _________________ . Increase the Income to \$80,000 and answer the following questions 5). If the price of the product is \$20, then the Quantity Demanded is _________________ and the Quantity supplied is _________________ and there is an Excess Supply / Demand of _________________ 6). The \$50,000 increase in income resulted in a change in Demand / Quantity Demanded of _________________ therefore this product is a Normal / Inferior good. 7). How did this increase in income impact the demand equation? By how much did the quantity demanded change at each price? 8). What impact did the increase in income have on equilibrium values in this market? Be specific. 9). What would be the new demand equation if income were increased to \$150,000? 10). Directions: Use the Supply and Demand Worksheet to answer the following questions. Please print this sheet and write your answers in the space provided or circle the correct answer on this sheet. You should place numbers in the spaces like _______ and circle one of the answer for each Supply / Demand, Demand / Quantity Demanded, or Normal / Inferior. What are the new equilibrium values of price and quantity when income is \$150,000? (You must show all your work to receive credit for this question and the spreadsheet does not go up this far.) Parameters Concerning the Determinants of Demand Original Values New Value Importance of Own Price 2 2 Original Equilibrium Values Income (in thousands) 30 30 Price 38.00 Price of Substitutes 7 7 Quantity Demanded 72.00 Price of Complements 11 11 Quantity Supplied 72.00 Parameters Concerning Determinants of Supply New Equilibrium Values Original Values New Value (to nearest dol ar) Importance of Own Price 3 3 Price 38 Cost of Labor 6 6 Quantity Demanded 72 Cost of Capital 10 10 Quantity Supplied 72 Level of Technology 2 2 (Exact Solution)...
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Basic Supply and Demand - Name Section 1 If the price of...

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