Free Enterprise/Price System Practice Problem Set
Work on these. If you have questions bring to class & use the discussion board on Vista to chat with other class members.
What does the equilibrium mean?
What is a shortage?
What is a surplus?
What is a price floor and what does it cause?
What is a price ceiling and what does it cause?
As of late, people haven’t been buying baseball cards like in the past. Furthermore, baseball card manufactures have also slowed down their production. What happens to price and quantity over time? Show graphically
Farmers have recently been producing more corn to keep up with the demand for ethanol production. Additionally, people have been substituting green bean purchases for corn. What happens to price and quantity? Show graphically.
If the demand for grapes have been increasing, and the supply of grapes have been increasing; what happened to prices and quantity? Show this graphically
TYCO RC game maker has doubled their output with a new piece of technology. Unfortunately, people haven’t been buying TYCO toys. What will happen to price and quantity? Show graphically.
Draw the Free Enterprise/Price System using the data below:
Price Quantity Demanded Quantity Supplied Shortage Surplus By how many units
$0.00 1200 0
$5.00 1000 200
$10.00 800 400
$15.00 600 600
$20.00 400 800
$25.00 200 1000
$30.00 0 1200
Questions to answer:
1. At what price will this person leave the market?
2. At a price of $0.00 how much will this person buy?
3. What is the supply price?
4. At a price of $30.00 this person will sell how many units?
5. What is the equilibrium price and quantity?