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Unformatted text preview: million dollars. Explain their high salaries in terms
of supply and demand. Doing the Math
Do the calculations necessary to solve the following
1. Price is $10, quantity demanded is 100 units,
and quantity supplied is 130 units. For each dollar decline in price, quantity demanded rises by
5 units, and quantity supplied falls by 5 units.
What is the equilibrium price? Working with Graphs
1. Identify the exhibit in the chapter that illustrates the following:
a. an increase in demand, supply constant
b. a decrease in supply, demand constant
2. Graphically represent the following:
a. a decrease in demand, supply constant
b. an increase in supply, demand constant
c. a decrease in demand equal to a decrease in
3. Explain what is happening in each part, (a)–(d),
of Exhibit 6-8. Solving Economic Problems
Use your thinking skills and the information you
learned in this chapter to find solutions to the following problems. EXHIBIT 6-8 P P S1 S1 S2 S2 P1
0 Q 0 (a) Q
(b) P P S1
0 Q 0 (c) Q
(d) 1. Analysis. Suppose that in 2005 the average
price of a meal at a restaurant was $20, and
50,000 restaurant meals were bought and sold.
In 2006 the average price was $22, and 60,000
meals were bought and sold. Which of the following events can explain a higher price and
more meals purchased and sold? Explain.
a. The supply of restaurant meals increased.
b. The demand for restaurant meals decreased.
c. The demand for restaurant meals increased.
2. Cause and Effect. Suppose the equilibrium
price of bread is $2 a loaf. The federal government mandates that no bread can be sold for
more than $1 a loaf. How will the market for
bread be different from when bread could be
purchased and sold for $2? Explain. Go to www.emcp.net/economics and choose Economics:
New Ways of Thinking, Chapter 6, if you need more help in
preparing for the chapter test. Chapter 6 Price: Supply and Demand Together 151 06 (128-153) EMC Chap 06 11/21/05 3:14 PM Page 152 Should There Be Price
Controls on Some Goods
at Certain Times? I n the summer of 2005, gasoline prices were rising. It was
common for people around the country to pay $3 or
more per ga...
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This document was uploaded on 01/16/2014.
- Winter '14