Please answer these three problems I will send you a picture clarifying the way problem 8 and 11 are set up.
1. Explain each of the following statements usingsupply-and-demand diagrams.
a. When a cold snap hits Florida, the priceof orange juice rises in supermarkets throughoutthe country.
b. When the weather turns warm in New Englandevery summer, the price of hotel rooms inCaribbean resorts plummets.
c. When a war breaks out in the Middle East, theprice of gasoline rises and the price of a usedCadillac falls.
8. The market for pizza has the following demand andsupply schedules:
Price Quantity Demanded Quantity Supplied$4 135 pizzas 26 pizzas5 104 536 81 817 68 988 53 1109 39 121
a. Graph the demand and supply curves. What arethe equilibrium price and quantity in this market?
b. If the actual price in this market were above theequilibrium price, what would drive the markettoward the equilibrium?
c. If the actual price in this market were below theequilibrium price, what would drive the markettoward the equilibrium?
11. Suppose that the price of basketball tickets at yourcollege is determined by market forces. Currently, thedemand and supply schedules are as follows:Price Quantity Demanded Quantity Supplied$4 10,000 tickets 8,000 tickets8 8,000 8,00012 6,000 8,00016 4,000 8,00020 2,000 8,000
a. Draw the demand and supply curves. What isunusual about this supply curve? Why might thisbe true?
b. What are the equilibrium price and quantity oftickets?
c. Your college plans to increase total enrollmentnext year by 5,000 students. The additional students will have the following demand schedule:Price Quantity Demanded$4 4,000 tickets8 3,00012 2,00016 1,00020 0Now add the old demand schedule and thedemand schedule for the new students tocalculate the new demand schedule for theentire college. What will be the newequilibrium price and quantity?
