Problem Sets ECONOMICS
Module 2 Problem Sets
| Principles of Economics |
| Name: |
| Date: |
Question #1
| Question #1: Equilibrium price is always determined by _____________________________________and __________________________________. |
| Answers: |
Question #2
| Question #2: Shortages are associated with price ________________; surpluses are associated with price __________________________________. |
| Answers: |
Question #3
| Question #3: If supply decreases and demand remains the same, equilibrium price will _________________, and equilibrium quantity will _________________________. |
| Answers: |
Question #4
| Question #4: Find the equilibrium price and quantity ( in units and dollars, respectfully). |
| Answers: |
Question #5
| Question #5: Draw in a new supply curve S1, showing a decrease in supply. What happens to equilibrium price and quantity? |
| Answer: |
Question #6
| Question #6: (a) Is $6 a price ceiling or price floor? (b) Is there a shortage or a surplus? (c) How much is in (in units of quantity)? |
| Answers: |
| a. |
| b. |
| c. |
Question #7
| Question #7: (a) Is $12 a price ceiling or price floor? (b) Is there a shortage or a surplus? ( c) How much (in units of quantity)? |
| Answers: |
| a. |
| b. |
| c. |
Question #8
| Question #8: (a). If the supply curve is S1, how much are equilibrium price and quantity? (b). If the supply changes from S1 to S2, does the represent an increase or decrease in supply? ( c). How much are the new equilibrium price and quantity? |
| Answers: |
| a. |
| b. |
| c. |
Question #9
| Question #9: A major technological improvement leads to a large decrease in the cost of production. Draw a new supply curve S2, to reflect this change. Then state the new equilibrium price and quantity. |
| Answer: |
Question #10
| Question #10: (a) Draw a new demand curve, D2, which illustrates a decrease in demand. (b). State what happens to equilibrium price and quantity. |
| Answers: |
| a. |
| b. |
Question #11
| Question #11: Show an increase in demand and a decrease in supply. (a) Label each of the curves (S1, S2, D1 and D2). (b). State the original equilibrium price and quantity. ( c) State the new equilibrium price and quantity. | |
| Answers: | |
| a. | |
| b. | |
| c. |
Question #12
| Question #12: The entire orange crop in Florida is affected by a freeze. On the graph show how demand and supply are affected and show the new equilibrium price and quantity for a bushel of oranges. |
| Answer: |
Question #13
| Question #13: As price rises, quantity supply will _________________________ accroding to the Law of Demand. |
| Answer: |
Question #14
| Question #14: An increase in supply is show graphically by a shift of the supply curve to the _________________________. |
| Answer: |
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