Question

4)The table below shows a weekly demand schedules for a Chicken Sandwich of two individuals John, Adam and rest of the market:

Chicken sandwich Price per lb. (dollars)	John Quantity Demanded (# per week)	Adam Quantity Demanded (# per week)	Rest of Market Quantity Demanded (# per week	Market Quantity Demanded (# per week)
$8	4	0	30
6	7	2	40
5	9	3	51
4	12	5	64
3	15	8	90

At a price of $5, the quantity demanded in the market would be:

5) Referring the same table above, if the price of chicken sandwich rises from $4 to $6, the market quantity demanded would

A) decrease by 32 pieces

B) decrease by 18 pieces

C) increase by 32 pieces

D) increase 16 pieces.

6) First draw a demand curve and label it. Then, demonstrate an increase and decrease in demand and label them separately. Starting with the first demand curve, explain an increase and decrease in quantity demanded. Then show possible shifts that would result from each of the following events:

a.   an increase in income and the good is a normal good

b.   an increase in income and the good is an inferior good

c.   a decrease in the price of a substitute good

d.   a decrease in the price of a complementary good

e.   an increase in the taste for the good

f.    a decrease in population

g.   an increase in the expected future price of the good

8) First draw a supply and demand graph with an equilibrium price of $100 and quantity of 500 units. Explain what would happen if the selling price was increased $125, and illustrate this on the graph. Explain what would happen if the selling price was decreased to $75, and illustrate this on the graph. Be sure to label each axis and curve on the graph.[Give your answer using graph]

9) Given the following graph, answer the next questions from a to g:

1. What is the value of consumer surplus at a price of $15?
2. What is the value of producer surplus at a price of $15?
3. What is the value of consumer and producer surplus at price of $18?
4. Who benefit and who lose with increase in price to $18?
5. What is the value of consumer and producer surplus at price of $13?
6. Who benefit and who lose with increase in price to $13?
7. Which price level is the economy better off?

11) Given that the value of the price elasticity of demand for a gallon of milk is -3. How do you interpret it?

Answer 1

Question 4

Market quantity demanded in the given case would be the summation of John's quantity demanded, Adam's quantity demanded and the rest of the market quantity demanded at each given price.

Following is the complete table -

Chicken sandwich price per lb	John's QD	Adam's QD	Rest of the market's QD	Market Quantity demanded
$8	4	0	30	34
6	7	2	40	49
5	9	3	51	63
4	12	5	64	81
3	15	8	90	113

The above table shows that,

At a price of $5, the quantity demanded in the market would be 63 chicken sandwiches.

Question 5

When the price of chicken sandwich is $4 then 81 chicken sandwiches would be demanded.

When the price of chicken sandwich is $6 then 49 chicken sandwiches would be demanded.

So, if the price of chicken sandwich rises from $4 to $6, the market quantity demanded would decrease by 32 pieces.

Hence, the correct answer is the option (A).