Macroeconomics

Problem-set Mini Exam Unit #2: 30 Points

Point values are indicated for each. Please, do not use red type, use black.

1. Using supply and demand analysis to evaluate the article below by following these steps: (5 pts)
   1. For #1 below, after reading the article, is it demand or supply side and in which direction is demand or supply moving? Type in the word "Demand" or "Supply" and then the direction of the changetype in "increasing" or "decreasing."
   2. Secondly, what determinant (shifter or your ) is causing the change? State one of the 5 on demand side, or one of the 7 from supply side from the lecture notes.
   3. Finally, what happens to equilibrium price and equilibrium quantity (Pe, Qe) in the market once the shift occurs? (Use arrows, or simply type "increase" or "decrease" after the Pe and Qe.)

Jan 7 (Reuters) - Severe rains have flooded coffee fields and other crops in central eastern areas in Brazil, the latest in a climate roller-coaster for the nation's agricultural regions that has included devastating frosts and droughts. (Market: Coffee beans)

1. _______________________________

1. __________________________

1. (Pe _____, Qe _____)

https://www.youtube.com/watch?v=vPRqJwjG8-Y

1. After watching my video, complete the following. Consider the bold, underlined term in each sentence then correct them, if needed, so that the terms "demand" and "quantity demanded," OR "supply" and "quantity supplied" are used correctly. If they are being used correctly, just type or write "NC" for no correction necessary. These are worth 2 points each, for a total of 10 points.

1. An article states that drinking a glass of warm lemon

water can help you live longer. As a result, the

quantity demanded for lemons increases. _______________

1. If the price of lemons increases, a key ingredient in

the production of lemon cakes made by Little Debbie,

the supply of lemon cakes will decrease. _______________

1. If the price of lemons increases, the

quantity demanded for oranges will increase. _______________

1. If the price of oranges increases, sellers will

increase the supply of oranges. _______________

1. The state of Florida, where most of our citrus

is grown, places a tax on citrus fruits like oranges

and lemons. This causes the quantity supplied of

oranges and lemons to decrease. _______________

1. The following table represents the market for Play Station Gaming Systems. Use the table to answer the questions below. (5 points)