Ch3 Demand and Supply (12 points total)

This problem is matching learning objectives of chapter 3 sections 3.1 to 3.3 making and using of demand and supply graph.

Suppose that thepriceofbasketball ticketsat your college is determined bymarket forces.

Currently, the demand and supply schedules are as follows:

Price $4

8 12

16 20

1.

Quantity Demanded 10,000 tickets

8,000 6,000 4,000 2,000

Quantity Supplied 8,000 tickets 8,000

8,000

8,000 8,000

(7 points)

a. Using the above figures, draw a demand and supply graph for the basketball

tickets in the college. (2 points)

i.Instruction and grading rubric: Vertical axis should be price and

horizontal axis should be quantity; demand and supply curves (lines in this exercise) should be on the same panel to show the equilibrium point. The graph should be correctly labeled plotted.

b. What is unusual about this supply curve? (1 point)

1

Source unknown. Adapted and Modified by Choikam M Yip, M.S., Economics Instructor For EC201 Written Assignment

2.

Price $4

8 12

c. Why might this be true (hint: think about the college and the basketball game)? (1 point)

1. Can you name another real world example having a supply like this, explain? (2 points)
2. What are the equilibrium price and quantity of tickets from your graph? (1 point)

(5 points)

Your college plans to increase total enrollment next year by 5,000 students. (Section 3.2 Changes and Shifts in Demand) The additional students will have the following demand schedule:

Quantity Demanded

4,000 tickets 3,000

2,000

1,000

16

20 0

1. Draw and add a new demand curve on the graph you have drawn on question 1a. Please write down the new quantity demanded figures for your new demand curve. (Hint: summing the old and new quantity demanded would be the new demand curve for the college.) (2 points)
2. What will be the new equilibrium price and quantity after the change? (1 point)
3. What is the factor that affects the change in demand in this case? Explain how price
4. is adjusted and changed to the new equilibrium level. (2 point)

2