Question

Please choose one of the following questions to answer and share your understanding of the concept of a specific subject. It is highly recommended that you read all questions carefully to select one, and a minimum number of words in your post is at least 60.

1. What is wrong with this statement? Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period.
2. What is the difference between demand and quantity demanded?
3. True or false? As the price of oranges rises, the demand for oranges falls, ceteris paribus. Explain your answer.
4. “The price of a bushel of wheat, which was $3.00 last month, is $3.70 today. The demand curve for wheat must have shifted rightward between last month and today.” Explain.
5. Some goods are bought largely because they have “snob appeal.” For example, the residents of Beverly Hills gain prestige by buying expensive items. In fact, they won’t buy some items unless they are expensive. The law of demand, which holds that people buy more at lower prices than at higher prices, obviously doesn’t hold for the residents of Beverly Hills. The following rules apply in Beverly Hills: high prices, buy; low prices, don’t buy. Explain.
6. With respect to each of the following changes, identify and explain whether the demand curve will shift rightward or leftward:
   • An increase in income (the good under consideration is a normal good)
   • A rise in the price of a substitute good
7. With respect to each of the following changes, identify and explain whether the demand curve will shift rightward or leftward:
   • A fall in the price of a complementary good
   • A fall in the number of buyers
8. How might the price of corn affect the supply of wheat?
9. What is the difference between supply and quantity supplied?
10. At equilibrium in a market, the maximum price buyers would be willing to pay for the good is equal to the minimum price sellers need to receive before they are willing to sell the good. Do you agree or disagree with this statement? Explain your answer.
11. Must consumers’ surplus equal producers’ surplus at equilibrium price? Explain your answer.
12. Many movie theaters charge a lower admission price for the first show on weekday afternoons than for a weeknight or weekend show. Explain.
13. A Dell computer is a substitute for a HP* computer. What happens to the demand for HP computers and the quantity demanded of Dell computers as the price of a Dell falls?
14. Describe how each of the following will affect the demand for personal computers:
    • A rise in incomes (assuming computers are a normal good);
    • A lower expected price for computers;
15. Describe how each of the following will affect the demand for personal computers:
    • Cheaper software;
    • Computers that are simple to operate
16. Describe how each of the following will affect the supply of personal computers:
    • A rise in wage rates;
    • An increase in the number of sellers of computers;
17. Describe how each of the following will affect the supply of personal computers:
    • A tax placed on production of computers;
    • A subsidy placed on the production of computers.
18. Use the law of diminishing marginal utility to explain why demand curves slope downward.
19. Explain how the market moves to equilibrium in terms of shortages and surpluses and in terms of maximum buying prices and minimum selling prices.
20. Think of ticket scalpers at a rock concert, a baseball game, and an opera. Might they exist because the tickets to these events were originally sold for less than the equilibrium price? Why or why not? In what way is a ticket scalper like and unlike your retail grocer, who buys food from a wholesaler and then sells it to you?
21. Many of the proponents of price ceilings argue that government-mandated maximum prices simply reduce producers’ profits and do not affect the quantity supplied of a good on the market. What must the supply curve look like before a price ceiling does not affect quantity supplied?
22. James lives in a rent-controlled apartment and has for the past few weeks been trying to get the supervisor to fix his shower. Why does waiting to get one’s shower fixed have to do with a rent-controlled apartment?
23. Explain why fewer exchanges are made when a disequilibrium price (below equilibrium price) exists than when the equilibrium price exists.
24. Buyers always prefer lower prices to higher prices. Do you agree or disagree with this statement? Explain your answer.
25. What is the difference between a price ceiling and a price floor? What effect is the same for both a price ceiling and a price floor?
26. If the absolute price of good X is $10 and the absolute price of good Y is $14, then what is (a) the relative price of good X in terms of good Y and (b) the relative price of good Y in terms of good X?
27. Give a numerical example that illustrates how a tax placed on the purchase of good X can change the relative price of good X in terms of Y.

Answer 1

Question - What is the difference between supply and quantity supplied?

ANSWER-

SUPPLY- Supply can be called as the quantity of product which the producer is ready to introduce in the market for the sale to the consumers. The quantity of the supply depends upon the price of the commodity in the market. The quantity to be supplied and the price are directly related to each other.

In the case of supply the other than price factors remain constant such as taste of the consumers, price of the related goods etc.

The increase or decrease in the price of the commodity can bring out the expansion or the contraction in the supply respectively.

This will lead to the movement along the supply curve.

QUANTITY SUPPLIED- The quantity supplied means the quantum of the product for the supply which is affected by the other than price factors. The price in the case of quantity supplied remains constant . In other words in this the external and indirect factors affect the supply of a commodity.

This brings about the increase and decrease in the quantity supplied of a commodity and is responsible of the rightward (increase in quantity supplied) or the leftward (decrease in quantity supplied) shift in the supply curve keeping the price constant.

The supply is affected by the price of the commodity in the market but the quantity supplied is not affected by the price.

Supply leads to movement along the supply curve and quantity supplied leads to the shift in supply curve.