ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 6.13P
To determine
If the given statements as True, false, or uncertain and explanation for each option chosen.
Concept Introduction:
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Question 4
Suppose there is a decrease in supply in a market where the supply curve slopes upwards
and the demand curve slopes downwards. Which of the following would not occur?
a) An excess supply.
b) A fall in price.
c) A fall in supply.
d) A fall in the equilibrium level of expenditure.
Question 5
Suppose a market is in equilibrium, and then the demand increases. Which of the following
would be shown on a graph that illustrated the effects?
a) An excess demand at the initial equilibrium price.
b) An excess demand at the new equilibrium price.
c) An excess supply at the initial equilibrium price.
d) An excess supply at the new equilibrium price.
The following table shows the weekly demand and supply in the market for ice cream in Detroit.
dy Tools
Price
Quantity Demanded
Quantity Supplied
(Dollars per gallon of ice cream)
(Gallons of ice cream)
(Gallons of ice cream)
4
2,000
200
Tips
1,600
600
12
1,200
800
Tips
16
800
1,200
20
400
1,800
כ
On the following graph, plot the demand for ice cream ușing the blue point (circle symbol). Next, plot the supply of ice cream using the orange point
(square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for ice cream.
g
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
24
Demand
20
16
Supply
12
MacBook Air
per gallon of ice cream)
Question 2
The equilibrium price of televisions fell significantly in the past month; however the equilibrium quantity remained unchanged. Three individuals provided an explanation for the situation. Which explanation(s) could be correct? Explain your logic.
Mark: Demand increased, but supply was totally inelastic.
Shawn: Supply increased, but so did demand.
Annica: Supply decreased, but demand was totally inelastic
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