For each dollar decline in price quantity demanded

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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 problem. 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 and Tables 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 supply 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 P2 D1 0 Q 0 (a) Q (b) P P S1 P2 P1 D2 D2 D1 D1 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.

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