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Chapter 3: 23 (page 48)
Name some factors that can cause a shift in the
demand curve in markets for goods and services.
Demand for the good and the price of commodity etc are the reason for shift in demand curve.
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Let鈥檚 think about the market for air travel. From August 2014 to January 2015, the price of jet fuel increased roughly . Using the four-step analysis, how do you think this fuel price increase affected the equilibrium price and quantity of air travel?
What is deadweight loss?
A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat screen
televisions. Using the four-step analysis, how do you think the tariff reduction will affect the equilibrium price and
quantity of flat screen TVs?
Table 3.8 shows the information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.
a. What is the quantity demanded and the quantity supplied at a price of \(210?
b. At what price is the quantity supplied equal to 48,000?
c. Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and equilibrium quantity?
d. If the price was \)120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?
What is consumer surplus? How is it illustrated on a demand and supply diagram?
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