ECON 500 Questions for Chapter 3 Questions from the textbook: Review questions 1, 2, and 4 (page 85). Problems 1, 2, 3, 4, 5, 7, 8, 9, 12, 13, 14, and 15 (pages 85-86). Additional problems: 1) Consider a market in which demand is given by the function ppD500)(= and supply is given by the function ppS 5)(=. a. Graphically illustrate the demand curve in this market. b. Graphically illustrate the supply curve in this market. c. Determine if there is excess demand, excess supply, or neither at each of the following price: p=5, p=10, p=25. d. If demand changes to ppD320)(=, does this correspond to an increase in demand or a decrease in demand? Explain. e. Determine the equilibrium price and quantity when demand is given by ppD500)(=. Determine the equilibrium price and quantity when demand is given by ppD320)(=.2) Consider a market with Supply and Demand as illustrated below: a. Does the “Law of Demand” appear to be satisfied? Explain. b. Does the “Law of Supply” appear to be satisfied? Explain. c. Is there “excess demand,” “excess supply,” or neither at a price of 45.15=p ? Explain. d. Based upon the figure above, can you determine if a price floor of 75.12=fp have an affect on this market? Explain. e. Based upon the figure above, can you determine if a price floor of 50.17=fp have an affect on this market? Explain. $ Q Supply Demand 15.45 2,750
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