Question: 1

Draw the market supply and demand curves for coffee by using the following information. Mention
the equilibrium price and quantity.

Price ($) Quantity Supplied (Pounds) Quantity Demanded

(Pounds)
5 8,000 1,000
4 7,000 3,000
3 5,000 5,000
2 3,000 8,000
1 1,000 12,000

Question: 2 (P-100)

The market for baseball tickets at your college stadium, is the following.

Price ($) Quantity Demanded Quantity Supplied Difference Surplus/

(No. of tickets) (No. of tickets) Shortage
2 4,000 1,000
4 2,000 2,000
6 1,000 3,000
8 500 4,000

A. Draw the market supply and demand curves for baseball tickets. What is the equilibrium price?

B. What is the equilibrium quantity?

C. Would there be an excess demand?

D. Is there an excess supply?

E. Suppose that the addition of new students (all big baseball fans) next year will add 1,000 to the
quantity demanded at each price. What will this do to next year’s demand curve? What are the new
equilibrium price and quantity?

Question: 3

Using the demand curve, show the effect of the following events on the market for beef;

a. Consumer income increases.

b. The price of beef increases. Demand will decrease

c. There is an outbreak of “mad cow” disease.

d. The price of chicken (a substitute) increases.

e. The price of barbecue grills (a complement) increases.