Assignment covers Chapter 3 Material
Problem 1Suppose that the market for home computers is in equilibrium. Determine how the following change to a determinant of supply and/or demand will affect the equilibrium price and quantity. Draw a graph to illustrate each answer.
a) Computers become easier to use.
b) The price of computer hard drives fall.
c) Software prices fall. (Software is a complement product used with computers.)
d) All college students are required to own personal computers.
e) Doctors warn of health risks from radiation from computer monitors.
Problem 2
Suppose that the market for wooden number 2 lead pencils is in equilibrium. Determine how the following change to a determinant of supply and/or demand will affect the equilibrium price and quantity. Draw a graph to illustrate each answer.
a) Professors require ink on all exams.
b) The price of lead increases.
c) School attendance falls.
d) Environmental legislation restricts lumber harvests.
e) Pencil makers receive a large wage increase.
f) The price of ballpoint pens falls.