Questions of macroeconomic class
Question15: Market for Gasoline : match each graph with each statement______ 1. Americans revive their love of SUVs and the newly remodeled Hummer
Graph D
Graph C
Graph B
Graph A
D1
D2
S
Price
Quantity
Price
Quantity
Price
Quantity
Price
Quantity
D
D
S
D1
D2
S2
S1
S1
S2
a)Graph A b) Graph B c) Graph C d) Graph D
______ 2. Due to a recessionary economy, Americans are cutting back on the family vacation road trips
a)Graph A b) Graph B c) Graph C d) Graph D
______ 3. Costs of producing gasoline from crude oil has increased due to rising energy costs
a)Graph A b) Graph B c) Graph C d) Graph D
______ 4. In an attempt to increase the domestic production of oil and gasoline, Congress and the President have given the okay to drill in the Alaskan Arctic Preserve
a)Graph A b) Graph B c) Graph C d) Graph D
Question-15) Which of the following will NOT shift the market supply curve of good X?
a) A change in the cost of inputs used to produce good X. b) A change in the technology used to produce X. c) A change number of sellers of good X. d) A change in the price of good X.
Question 16) True-and-False Questions
1. Equilibrium price will go up if supply increases.
2. A shift of the supply curve to the right is an increase in supply.
3. Price and quantity supplied are positively related, and Price and quantity demanded are negatively related.
4. Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.
5. A government-imposed maximum price at which a good can be sold is called a price ceiling, and legal minimum price at which a good can be sold is a price floor
Problem I
are based on the demand and supply schedules for gasoline below (all quantities are in thousands of gallons per week):
Price per gallon
Quantity demanded
Quantity supplied
$1
8
0
2
7
1
3
6
2
4
5
3
5
4
4
6
3
5
7
2
6
8
1
7
1) Graph the demand and supply curves and show the equilibrium price and quantity.
2) At a price of $3 per gallon, would there be a surplus or shortage of gasoline? How much would the surplus or shortage be? Indicate the surplus or shortage on the graph.
3) At a price of $6 per gallon, would there be a surplus or shortage of gasoline? How much would the surplus or shortage be? Show the surplus or shortage on the graph.
4) Suppose the quantity demanded increased by 2,000 gallons per WEEK at each price. Find new Equilibrium What is the NEW equilibrium price in this case? Graph your answer
5) Suppose the quantity demanded DECREASED by 2,000 gallons per WEEK at each price. At a price of $3 per gallon, how much would the surplus or shortage be? What is the NEW equilibrium price in this case?
Problem II ( show your work)
Consider the market for pineapples in a small island nation. The demand: P = 60 3QD,
the supply is P = 10 + 2QS.
a. What is the market equilibrium price and quantity?
b. If suppliers ask for the price of $15, what will be the result in the pineapples the market? Graph your response.
c. If suppliers ask for the price of $8, what will be the result in the pineapples the market? Graph your response.
