Question

1.

a) Complete the following table by selecting the term that matches each definition.

Definition	Quantity Demanded	Demand Curve	Demand Schedule	Law of Demand
- A graphical representation of the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices
-The amount of a good that buyers are willing and able to purchase at a given price
-The claim that, other things being equal, the quantity demanded of a good falls when the price of that good rises
-A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices

b) Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology.

Your boss would like your help on a marketing research project he is conducting on the relationship between the price of juice and the quantity of juice demanded. He hands you the following document:

Price of Juice	Quantity of Juice Demanded
(Dollars per can)	(Billions of cans)
0.50	2,000
0.75	1,500
1.00	1,000
1.25	750

Your task is to take this____________________and construct a graphical representation of the data. In doing so, you determine that as the price of juice rises, the quantity of juice demanded decreases. This confirms the ___________________________.

2. Shen is a bike messenger who enjoys donuts and muffins. Suppose that the price of donuts increases. As a result, even though Shen purchases fewer donuts, he actually purchases more muffins than he would have before the price change. This phenomenon is known as the _______________________ effect.


3.

a)Suppose that Jake and Latasha are the only consumers of pizza slices in a particular market. The following table shows their annual demand schedules:

Price	Jake's Quantity Demanded	Latasha's Quantity Demanded
(Dollars per slice)	(Slices)	(Slices)
1	40	80
2	25	60
3	15	40
4	5	30
5	0	20

On the following graph, plot Jake's demand for pizza slices.  Next, plot Latasha's demand for pizza slices. Finally, plot the market demand for pizza slices.

(Please draw graph and explain who you got the points!!)

b) Now, suppose that Latasha moves away, leaving Jake as the only consumer in the market. As a result, there will be a ____________________ the market demand curve because there will be a change in quantity demanded_______________________.


4. Complete the following table by selecting the term that matches each definition.

Definition	Quantity Supplied	Supply Curve	Supply Schedule	Law of Supply
-The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises
-A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices
-The amount of a good that sellers are willing and able to supply at a given price
-A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices

5.

Suppose that Dmitri and Frances are the only suppliers of shoes in a particular market. The following table shows their annual supply schedules:

Price	Dmitri's Quantity Supplied	Frances's Quantity Supplied
(Dollars per pair)	(Pairs)	(Pairs)
10	0	16
20	16	32
30	24	44
40	28	52
50	32	56

On the following graph, plot Dmitri's supply of shoes. Next, plot Frances's supply of shoes. Finally, plot the market supply of shoes. (Please draw graph and mark how you got points!!)


6.

Consider the market demand for donuts.

Complete the following table by indicating whether an event will cause a movement along the demand curve for donuts or a shift of the demand curve for donuts, holding all else constant.

Event	Movement Along	Shift
- A decrease in income of consumers
-An increase in the price of donuts
-A change in the expectations of consumers about prices

Answer 1

1) (a) A graphical representation of the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices - Demand Curve

The amount of a good that buyers are willing and able to purchase at a given price - Quantity Demanded

The claim that, other things being equal, the quantity demanded of a good falls when the price of that good rises - Law of Demand

A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices - Demand Schedule

(b) demand schedule; law of demand

3.

4.

The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises - Law of Supply
A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices - Supply Curve
The amount of a good that sellers are willing and able to supply at a given price - Quantity Supplied
A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices - Supply Schedule

5.

6. (a) A decrease in income of consumers - Shift of demand curve as demand changes due to change in factors other than price.

(b) An increase in the price of donuts - Movement along demand curve as demand changes due to change in the price of commodity.

(c) A change in the expectations of consumers about prices - Shift of demand curve as demand changes due to change in factors other than price.