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Homework203_3

# Homework203_3 - shortage at the going market price Using...

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Economics 203- Homework #3 Course ID_____________________ Due: Thursday, Feb. 10 th (in class!) Section #______________________ 1. Using the schedule given below, plot the supply and demand lines on the axes provided. Price Quantity Demanded Quantity Supplied 1 9 0 2 8 2 3 7 4 4 6 6 5 5 8 6 4 10 7 3 12 8 2 14 9 1 16 Price 0 2 4 6 8 10 12 14 16 Quantity Refer to the table above to correct the following statements. The underlined portions should be taken as given, but the remaining parts of the statement are incorrect. Rewrite each statement correctly. As price falls from 7 to 2 : supply increases, demand falls, and the market goes from an excess supply of one to an excess demand of seven. As price rises from 3 to 4: supply increases, demand falls, and the market goes from an excess supply of one to an excess demand of six.

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2. A record-hot summer in Syracuse caused a shortage of air conditioners. Use a supply-and- demand model to depict the market for air conditioners. Be sure to label the size of the
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Unformatted text preview: shortage at the going market price. Using economic theory, explain what will happen overtime to the price of air conditioners and the shortage. 3. Slippery Slope is a local ski resort with plans to build new condominiums for guests next year. In order to start building, Slippery Slope must raise additional revenue. What should Slippery Slope do-- raise the price of their lift tickets OR lower the price of their lift tickets? Explain. 4. In the 1970s, the OPEC oil embargo cut supplies of Middle Eastern oil to the United States drastically. As a result, gasoline prices shot way up. Studies show that in the first six months of this crisis there was a relatively small decrease in gasoline purchases. However, after six months gasoline purchases dropped considerably. How do you explain the difference between the short-term demand and long-term demand for gasoline?...
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Homework203_3 - shortage at the going market price Using...

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