Exam Exercises on Market Demand and Supply Analysis | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

SEMINAR 3 BEC4001
1. The market demand and market supply for tomato are in the below table: Price ($/kg) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Quantity supplied (kg) 80 68 62 55 50 45 38 Quantity demanded (kg) 30 35 40 45 50 55 60 1.1.
Define the equilibrium price and equilibrium quantity. 1.2.
What happens if the government impose the ceiling price a. PC = 3.0 b. PC = 1.5 1.3.
Suppose that the government subsidizes growers at 1$ per kg
a. What are new demand and supply schedules?
b. What is new market equilibrium?
c. How much does the government have to spend? 1.4.
Suppose that the government imposes flooring price at 2.5$/kg, then it purchases the
surplus. How much does the government have to spend? 1.5.
Suppose that the government buys all the produced tomatoes at the price of 2.5$/kg, then sells them in the market.
a. What is the maximum price that the government can set in the market?
b. How much does the government have to spend?
2. The demand and supply schedules for potato chips are in the below table. Quantity Quantity Price demanded supplied (cents per bag) (millions of bags a week) 50 160 130 60 150 140 70 140 150 80 130 160 90 120 170 100 110 180 2.1.
a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity.
b. If the price is 60¢ a bag, is there a shortage or a surplus, and how does the price adjust?
2.2 In Problem 1, a new dip increases the quantity of potato chips that people want to buy by
30 million bags per week at each price.
a. Does the demand for chips change? Does the supply of chips change? Describe the change.
b. How do the equilibrium price and equilibrium quantity of chips change?
2. 3. In Problem 2, if a virus destroys potato crops and the quantity of potato chips produced
decreases by 40 million bags a week at each price, how does the supply of chips change?
2. 4. If the virus in Problem 3 hits just as the new dip in Problem 21 comes onto the market,
how do the equilibrium price and equilibrium quantity of chips change?
3. U.S. Craft Beer Bolsters U.K. Hop Production
U.K. hop farmers stepped up production in response to a rapid growth of U.S. craft beer
production. U.S. craft beer makers prefer the subtle taste of U.K. hop varieties. Source: BBC, October 3, 2014
a. Describe the changes in the market for U.S. craft beer.
b. Explain whether the increase in U.K. hop production is a change in supply or a change in the quantity supplied.
c. What could be the impact on the price of U.K. hops if U.S. farmers switched to U.K. hop varieties.
4. Vietnamese Farmers Switch to Pepper as Coffee Prices Fall
The high pepper price and falling coffee price have made Vietnamese farmers replace coffee
plants with pepper plants. Analysts fear farmers have used diseased pepper plants, which
could fail. Source: VietNam News, May 28, 2016
a. Explain how the market for Vietnamese coffee will change as farmers switch to pepper.
b. If pepper plants fail, what would happen to the price of pepper?
5. Use the following figure, which shows the market
for tomatoes, to work below Problem.
If the government taxes growers at $4 a pound, what is
the quantity produced, the quantity demanded, and the tax revenue?
6. Use Figure 6.1, which shows the market for
rental housing in Townsville, to work Problems a, b and c.
a. What are the equilibrium rent and equilibrium quantity of rental housing?
b. If a rent ceiling is set at $600 a month, what is
the rent paid? What is the shortage of housing?
c. If the rent ceiling is $300 a month, what is the
quantity rented, the shortage of housing, and the
maximum price that someone is willing to pay for
the last unit of housing available?
7. Use the following data on the demand Quantity Quantity
and supply schedules of teenage labor to Wage rate demanded supplied work Problems a and b. (dollars per (hours per month)
a. Calculate the equilibrium wage rate, hour)
the hours worked, and the quantity of 6 2,500 1,500 unemployment. 7 2,000 2,000
b. The minimum wage for teenagers is $8 8 1,500 2,500 an hour, 9 1,000 3,000  How many hours are unemployed? 
If the demand for teenage labor increases by 500 hours a month, what is the wage rate and how many hours are unemployed?