1. Equilibrium A. Draw a graph with hypothetical demand and supply curves. Label the axes, each curve, the equilibrium, the equilibrium price, P*, and the equilibrium quantity, Q*. (3 points) Custom Essay

AP Microeconomics Assignment: Apply Concepts of Market Equilibrium Page 1 of 2 1. Equilibrium A. Draw a graph with hypothetical demand and supply curves. Label the axes, each curve, the equilibrium, the equilibrium price, P*, and the equilibrium quantity, Q*. (3 points) B. If the market price is below P*, what will happen to inventories and what will buyers do to cause the price to rise? (3 points) C. If the market price is above P*, what will happen to inventories and how will sellers react? (3 points) D. Equilibrium means the quantity supplied equals the quantity demanded. What else does equilibrium mean? (3 points) 2. Price Ceiling A. Draw a graph with hypothetical demand and supply curves. Label the axes, each curve, and the equilibrium. Pick a price-ceiling price below the equilibrium price, and label it on your graph as PC. (3 points) B. What is a price ceiling? (3 points) C. Why dont we choose a price ceiling above the equilibrium price? (3 points) D. On your graph, indicate the quantity consumers want to buy, QDC, and the quantity sellers want to sell, QSC. (3 points) E. Does a price floor cause a shortage or does it cause a surplus? Explain in words. (3 points) 3. The government occasionally uses price supports to aid farmers. A price support works like this: the government promises to buy all the produce the farmer cannot sell in the market at some pre-set price. For example, if the price of lettuce was $.30 a head in the market, the government might offer a price support of $.50 a head. Show and explain that the effect of a price support is the same as a price floor. You should use graphs to aid your explanation. (9 points) 4. Using both a written explanation and a graph, explain the effect of each of the following on the equilibrium price, P* and the equilibrium quantity, Q*, in a hypothetical market for basketball shoes. Draw a new graph for each question, starting with the original situation each time, and label your graphs completely. A. Basketball shoes become much more popular. (3 points) B. It rains all summer long. (Assume outdoor basketball is popular.) (3 points) C. Wages of shoe factory workers increase. (3 points) AP Microeconomics Assignment: Apply Concepts of Market Equilibrium Page 2 of 2 D. The prices of leather and cotton fall. (3 points) E. Basketball shoes become much more popular and wages of shoe factory workers increase. (3 points) F. Basketball shoes become much more popular and the prices of leather and cotton fall. (3 points) G. It rains all summer and the prices of leather and cotton decrease. (3 points) H. It rains all summer and theres an increase in wages of shoe factory workers. (3 points) ____________ ? Copyright 2002 Apex Learning, Inc. All rights reserved. This material is intended for the exclusive use of registered users only. No portion of these materials may be reproduced or redistributed in any form without the express written permission of Apex Learning, Inc.

Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.

CategoriesUncategorized