‘Name Fill in the following table, Draw new curves on the graphs to aid you. Show the is Managerial Economics Practice Assignment # 1 From: Dr. Abdul Waheed tal effects of the events on tach market. For shifts of the demand curve (0). shifts of the supply curve (5), equilibrium price (P), and equilibrium quantity (Q), use (+) oF (- ) to show increase or decrease; for no change, use (Q). A rightward shift of the supply or demand curve is an increase. If the effect cannot be determined from the information, use (). Market Evens o s 2. Video easseue Technological ad- . recorders vances reduce 2 qwers) costs of producing C vers. ae Guanity . Wood-buming The price of stoves heating cit and g eatural ges tiple. = «. Florida citrus Frost destroys 50 Products percent of the 2 Florida erop. i 4. Fast food ‘The public shows greater concem Over bigh sodium and 3 cholestro; there “ is an increase in the minimum wage, Bicycles There is increasing concer about physical fitness; g the price of . gasoline rises. GuantityMarket Events E Hospital services Substantially higher wages are paid 10 hospital employees ‘with no increase in their productivity. Quantity Ts Price g. Beer Population 21-25, celebrity advertisements of beer increase. Ouantity Suppose that student demand for tickets to a concert is as follows: Quantity Price demanded 32 8,000 4 5,000 6 2,500 8 1,500 (2) With seating capacity ixed at 5,000 seats, would there be either excess demand or excess supply at a ticket price of $62 2) What ticket price should be set to ensure that all seats are taken (so that there is neither a surplus nor a shortage of zeats)? (©) The demand schedule above may apply to an “average” concert. Suppose that a very popular performer is booked and the quantity of tickets demanded at each price doubles. What is the new equilibrium price? (@ Are concerts or other events at your university usually priced to create an equilibrium situation where quantity supplied exactly equals quantity demanded? Why or why not?3. lotic pump shoes sold in the local mall ‘You ate given the following supply and demand schedules for high-top, {in pairs per month): a @ @. @ Price Quantity Quantity Excess Demand (-) per pair Gemanded supplied __Excess Supply (+) s 60 10) 100 0 Bo Mo 80 m0 90 no 130 100 10 40 “110 a 120 a Indicate the equilibria: price and quantity. (a) Using the grid below, plot the demand and supply curves. 150) 100 Price (6) ° 50100180 200250 uanoty (&) Fill in column (4) for values of excess demand and excess supply. What is the value of excess demand (supply) at equilibrium?(©). Suppose that a change in the teenage fashion world results in much greater demand for these high-top shoes. IC the demand for shoes shifts rightward by 80, what aze the new equilibrium price and quantity exchanged? Fill in a new column for the demand schedule above or draw in a new demand curve to show explicily the result j ‘Suppose that the cost of producing these shoes rises because the cost of leather increases, so supply shifts @ leftward by 40. What are the new equilibrium price and quantity exchanged, based on the demand curve in part (@)? Fill in anew column for the supply schedule above or draw in a new supply curve to show explicitly the result. (©) Given the supply and demand curves in part (a). the price was $60, why would that be a disequilibrium situation? In what direction would the price likely move? Explain, (Given the supply and demand curves in part (a). if the price was $100, why would that be a disequilibrium situation? In what direction would the price likely move? Explain. Interpret the following statements using the economic principles studied in this chapter. Wha: shifts ir supply oF demand (or both) best explain these? For each statcment, isthe sentence referring io a change in quantity supplied or a change in suppiy: a'change in quantity demanded or a change in demand? {@) Oil prices recover as OPEC cartel members agree to new restrictions on output. (b)_ Reiail prices of personal computers fall despite booming sales. (©) Apartment rents rise as student enrollments swell. (Lower air fares spark busiest-ever air travel over a holiday period. (©). Rising Christmas tee prices spur diversification by dairy farmers; pastures are converted to pines.