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1MicroProblem Set1Loyola - 1 EC302 INTERMEDIATE...

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1 EC302 - INTERMEDIATE MICROECONOMICS Loyola University Spring Semester 2012 Problem Set 1 Discussion Due Date: February 3, 2012 Answer all questions succinctly and thoroughly. 1. Consider the market for bread. Briefly describe what impact each of the following would have on demand, supply, equilibrium quantity, and equilibrium price of bread. Illustrate answers with graphs if helpful. a. A new type for fertilizer increases productivity of the wheat crop. b. The price of butter rises due to a disease affecting cows. c. Concern over food additives reduces the demand for bread. d. A work stoppage by bread producers increases labor costs. e. To support bread prices, the government agrees to buy all surplus bread and pay 10% more than the current market price. f. To help reduce inflation, the government places a ceiling on the price of bread equal to the lower price that existed two years ago. 2. You have estimated the demand for coffee for the following groups in an economics class. The demand curves are Male student demand =
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