1. A. How does a price ceiling set below the equilibrium level affect quantity demanded and  quantity supplied? 

B. How does a price floor set above the equilibrium level affect quantity demanded and quantity supplied? 

2. The table below shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.  

Price ($)

Qd

Qs

120

50

36

150

40

40

180

32

48

210

28

56

240

24

70

A. What is the quantity demanded and the quantity supplied at a price of $210? (3 points). B. At what price is the market in equilibrium? (3 points). C. If the price is set at $120, what is the quantity demanded and quantity supplied? Does a shortage or surplus exist? If so, how large is the shortage or surplus? (4 points). 3.The table below illustrates the market’s demand and supply for cheddar cheese. Use this table to answer the questions.  

Price ($)

Qd

Qs

3.00

750

540

3.20

700

600

3.40

650

650

3.60

620

700

3.80

600

720

4.00

590

730

A. What is the equilibrium Qd, Qs, and price? (4 points). B. If the price of milk, a key input for cheese production, rises, so that the supply of cheese decreases by 80 pounds at every price, what is the new equilibrium price, Qd, and Qs? (6 points). 4. Consider the demand for hamburgers. If the price of a substitute good (for example, hot dogs) increases and the price of a complement good (for example, hamburger buns) increases, can you tell for sure what will happen to the demand for hamburgers? Why or why not? (10 points). 5.In recent years the computer market has seen more computers sell at much lower prices. What shift in demand or supply is most likely to explain this outcome? Explain your answer. (8 points). A. An increase in demand. B. A decrease in demand. C. An increase in supply. D. A decrease in supply. 6. Why are the factors that shift the demand for a product different from the factors that shift the demand for labor? (12 points). 7. Predict how each of the following events will increase or decrease the equilibrium wage and quantity of oil workers in Texas. A. The price of oil rises. (2 points). B. New oil-drilling equipment is invented that is cheap and requires few workers to run. (2 points). C.Several major companies that do not drill oil open factories in Texas, offering well-paid jobs outside the oil industry. (2 points). D.Government imposes costly new regulations to make oil-drilling a safer job. (4 points). 8. Under what circumstances would a minimum wage be a nonbinding price floor? (10 points). 9. In the financial market, what causes a movement along the demand curve? What causes a shift in the demand curve? (10 points). 10. What would be a sign of shortage in financial markets? (10 points)