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Unformatted text preview: m popcorn to easier-to-grow field corn, cutting supply
and pushing its price higher, too. …
USA Today, May 24, 2008
Explain and illustrate graphically the events
described in the news clip in the markets for
b. Viewing movies in the theater.
26. The table sets out the demand and supply schedules for potato chips.
per bag) 50
supplied (millions of bags per week) 160
180 a. Draw a graph of the potato chip market and
mark in the equilibrium price and quantity.
b. If the price is 60¢ a bag, is there a shortage or
a surplus, and how does the price adjust?
c. If a new dip increases the quantity of potato
chips that people want to buy by 30 million
bags per week at each price, how does the
demand and/or supply of chips change?
d. If a new dip has the effect described in c, how
does the price and quantity of chips change? e. If a virus destroys potato crops and the quantity of potato chips produced decreases by 40
million bags a week at each price, how does
the supply of chips change?
f. If the virus that destroys the potato crops in e
hits just as the new dip in c comes onto the
market, how does the price and quantity of
27. Sony’s Blu-Ray Wins High-Definition War
Toshiba Corp. yesterday raised the white flag in
the war over the next-generation home movie format, announcing the end of its HD DVD business in a victory for Sony Corp.’s Blu-ray
technology. The move could finally jump-start a
high-definition home DVD market that has been
hamstrung as consumers waited on the sidelines
for the battle to play out in a fight reminiscent of
the VHS-Betamax videotape war of the 1980s.
The Washington Times, February 20, 2008
How would you expect the end of Toshiba’s HD
DVD format to influence
a. The price of a used Toshiba player on eBay?
Would the outcome that you predict result
from a change in demand or a change in supply or both, and in which directions?
b. The price of a Blu-ray player?
c. The demand for Blu-ray format movies?
d. The supply of Blu-ray format movies?
e. The price of Blu-ray format movies?
f. The quantity of Blu-ray format movies?
28. After you have studied Reading Between the Lines
on pp. 72–73, answer the following questions:
a. How high did the retail price of gasoline go in
b. What substitutions did drivers make to
decrease the quantity of gasoline demanded?
c. Why would the switch to summer-grade fuel
and the seasonal increase in travel normally
raise the price of gasoline in the spring?
d. What were the two main factors that influenced the demand for gasoline in 2008 and
how did they change demand?
e. What was the main influence on the supply of
gasoline during 2007 and 2008 and how did
f. How did the combination of the factors you
have noted in d and e influence the price and
quantity of gasoline?
g. Was the change in quantity a change in the
quantity demanded or a change in the quantity supplied?...
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