Exam 2: The Basics of Supply and Demand

The demand for tickets to the Daytona 500 NASCAR event is given by the equation The supply of tickets to the event is given by the capacity of the Daytona track, which is 150,000. What is the equilibrium price of tickets to the event? What is the price elasticity of demand at the equilibrium price? What is the price elasticity of supply at the equilibrium price?

Sugar can be refined from sugar beets. When the price of those beets falls,

Suppose the cable TV industry is currently unregulated. However, due to complaints from consumers that the price of cable TV is too high, the legislature is considering placing a price ceiling on cable TV below the current equilibrium price. Assuming the government does make this price ceiling law, please construct a diagram that shows the impact of this law on the cable TV market, and please briefly explain the effects on market prices and quantities with supply and demand analysis. Also, if the cable TV company is worried about disgruntling customers, the company may introduce a different type of programming that is cheaper for the company to provide yet is equally appealing to customers. What would be the effects of this action?

The daily demand for hotel rooms on Manhattan Island in New York is given by the equation The daily supply of hotel rooms on Manhattan Island is given by the equation Diagram these demand and supply curves in the price and quantity space. What is the equilibrium price and quantity of hotel rooms on Manhattan Island?

Suppose the U.S. demand curve for gasoline shifts rightward, and the U.S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent. Which of the following statements is true based on this information?

Which of the following public policies is an example of a price ceiling?

In a city with a medium-sized population, the equilibrium price for a city bus ticket is $1.00, and the number of riders each day is 10,800. The short-run price elasticity of demand is -0.60, and the short-run elasticity of supply is 1.0. a. Estimate the short run linear supply and demand curves for bus tickets. b. If the demand for bus tickets increased by 10% because of a rise in the world price of oil, what would be the new equilibrium price of bus tickets? c. If the city council refused to let the bus company raise the price of bus tickets after the demand for tickets increases (see (b) above), what daily shortage of tickets would be created? d. Would the bus company have an incentive to increase the supply in the long run given the city council's decision in (c) above? Explain your answer.

For computers and other business equipment, small changes in business earnings tend to generate relatively large short-run changes in the demand for this equipment, and the long-run income response tends to be smaller. Industries that face demand behavior of this type are known as:

Figure 2.5.3 -Refer to Figure 2.5.3 above. The graph , as it appears in the textbook, shows two series, each corresponding to a growth rate. The dashed trend series corresponds to:

From 1970 to 2017, the real price of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs?

Elasticity measures:

Figure 2.7.1 -Refer to Figure 2.7.1. Which of the price levels in the figure will result in a shortage?

Historically, investors have considered gold commodities to be a good investment to preserve wealth in times of inflation. If investors are no longer worried about inflation and gold demand decreases, what do you expect will happen to gold prices? How would your answer change if you learn that a recent gold mine discovery will increase the supply of gold?

Figure 2.3.1 -Refer to Figure 2.3.1. In Example 2.4, the textbook describes the impact of 9/11 on the real estate market in New York city. How does the sketch in figure 2.3.1 adapt to the described scenario?

Figure 2.4.1 -Refer to Figure 2.4.1. At point E, demand is:

Suppose there is currently a surplus of wheat on the world market. The problem of excess supply may be removed from the market by:

Figure 2.6.2 -Refer to Figure 2.6.2 above. Which of the following is a proper value for Z in the vertical axis?

Suppose that the short-run world demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 billion barrels per year. Derive the linear demand and supply equations.

Which of the following would shift the demand curve for new textbooks to the right?

By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology. However, the costs of producing electric autos may increase because of higher costs for inputs (e.g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i.e., learning by doing). What is the expected impact of these changes on the equilibrium price and quantity for electric autos?