Economics Study Guide

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3. Using the following schedule, define the equilibrium price and quantity. Describe the situation at a price of $10. What will occur? Describe the situation at a price of $2. What will occur? Price Quantity Demanded Quantity Supplied $1 500 100 $2 400 120 $3 350 150 $4 320 200 $5 300 300 $6 275 410 $7 260 500 $8 230 650 $9 200 800 $10 150 975 4. Suppose the government imposed a minimum price of $7 in the schedule of exercise 3. What would occur? Illustrate 5. In exercise 3, indicate what the price would have to be to represent an effective price ceiling. Point out the surplus or shortage that results. Illustrate a price floor and provide an example of a price floor.

3. Using the following schedule, define the equilibrium price and quantity. Describe the situation at a price of
$10. What will occur? Describe the situation at a price of $2. What will occur?

Price	Quantity Demanded	Quantity Supplied
$1	500	100
$2	400	120
$3	350	150
$4	320	200
$5	300	300
$6	275	410
$7	260	500
$8	230	650
$9	200	800
$10	150	975

4. Suppose the government imposed a minimum price of $7 in the schedule of exercise 3. What would occur?
Illustrate.

Price	Quantity Demanded	Quantity Supplied
$1	500	100
$2	400	120
$3	350	150
$4	320	200
$5	300	300
$6	275	410
$7	260	500
$8	230	650
$9	200	800
$10	150	975

5. In exercise 3, indicate what the price would have to be to represent an effective price ceiling. Point out the surplus
or shortage that results. Illustrate a price floor and provide an example of a price floor.

Price	Quantity Demanded	Quantity Supplied
$1	500	100
$2	400	120
$3	350	150
$4	320	200
$5	300	300
$6	275	410
$7	260	500
$8	230	650
$9	200	800
$10	150	975

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