Question

Below, you are provided with the number of lattes per week that five college students want to purchase at different prices. You will use this information to build a demand schedule and to construct a demand curve.

Miranda: “I only ever want one latte. But I only buy lattes when the price is no more than $2.”

Elijah: “I don’t buy lattes if they cost more than $4. If they cost $4 or less, I’ll buy one. Oh, and if they are $2 or less, I’ll buy two.”

Marcos: “I will buy one latte if they do not cost more than $5, I will buy two if they do not cost more than $3, and I will buy three if they do not cost more than $1.”

Sarah: “I can only drink one latte, and I would never pay more than $3 for one.”

Joshua: “I love lattes, but I’m on a budget. I can’t spend more than $5 for a latte. But if they cost $4 or less, I would get two. Oh, yeah, and if they were $1 or less, I would drink three.”

Part 1: If the price of a latte is $4, how many lattes are demanded? By whom?

Part 2: If the price of a latte is $2, how many lattes are demanded? By whom?

Part 3: Use the statements above to create a demand schedule

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Below, you are provided with a supply schedule for globes, which gives the number of globes that sellers are willing to sell at different prices. You will use this information to construct a supply curve.

Price	Quantity of Globes Supplied
$9.00	30
$7.50	20
$6.00	10
$4.50	0

Part 1: Plot each of the four price/quantity combinations that are provided in the supply schedule above. Connect the four points.

Part 2: Based on the supply curve that you constructed above, what is the quantity of globes supplied when the price of a globe is $6.00?

Part 3: Based on the supply curve that you constructed above, what is the quantity of globes supplied when the price of a globe is $8.25?

Answer 1

Question 1

PART 1

The information provided in the above statements clearly depict that if the price of latte is $4 then in that case only Elijah, Marcos, and Joshua are interested in buying latte.

So,

At price of $4 per latte, 4 lattes are demanded.

Elijah will demand 1 latte. Marcos will demand 1 latte. Joshua will demand 2 lattes.

Part 2

The information provided in the above statements clearly depict that if price of latte is $2 then in that case all five persons will be interested in buying latte.

So,

At the price of $2 per latte, 8 lattes are demanded.

Miranda will demand 1 latte. Marcos will demand 1 latte. Elijah will demand 2 lattes. Sarah will demand 2 latte. Joshua will demand 2 lattes.

Part 3

Following is the required demand schedule -

Price per Latte	Quantity demand
$1	10
$2	8
$3	6
$4	4
$5	2