Answer the following problems found in your textbook in the back of the corresponding chapter. Upload your answers through Blackboard:

• Chapter 4: Questions 1, 2, 3, 4, 11, 12, 13, and 14 on p. 73

Your completed Homework assignment must be at least three to four pages in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. All references and citations used must be in APA style.

4-1 Explain why a demand curve slopes downward

1. (Shifting Demand) Using demand and supply curves, show the effect of each of the following on the market for cigarettes:

a.    A cure for lung cancer is found.

b.    The price of cigars increases.

c.     Wages increase substantially in states that grow tobacco.

d.    A fertilizer that increases the yield per acre of tobacco is discovered.

e.    There is a sharp increase in the price of matches, lighters, and lighter fluid.

f.      More states pass laws restricting smoking in restaurants and public places.

2. (Substitutes and Complements) For each of the following pair of goods, determine whether the goods are substitutes, complements, or unrelated:

a.    Peanut butter and jelly

b.    Privateandpublictransportation

c.     Coke and Pepsi

d.    Alarmclocksandautomobiles

e.    Golf clubs and golf balls

4-2 Identify five things which could shift a demand curve to the right or left

3. (Demand Shifters) List five things that are held constant along a market demand curve, and identify the change in each that would shift that demand curve to the right— that is, that would increase demand.

4-3 Explain why a supply curve usually slopes upward

4. (Supply) Why is a firm willing and able to increase the quantity supplied as the product price increases?

4-6 Predict the impact of a change in demand or supply on the equilibrium price and quantity

11. (Equilibrium) “If a price is not an equilibrium price, there is a tendency for it to move to its equilibrium level. Regardless of whether the price is too high or too low to begin with, the adjustment process will increase the quantity of the good purchased.” Explain, using a demand and supply diagram.

12. (Equilibrium) Assume that the market for corn is depicted as in the table that appears below.

a.    Completethetablebelow.

b.    What market pressure occurs when quantity demanded exceeds quantity supplied? Explain.

c.     What market pressure occurs when quantity supplied exceeds quantity demanded? Explain.

d.    What is the equilibrium price?

e.    What could change the equilibrium price?

f.      At each price in the first column of the table below, how much is sold?

13. (Market Equilibrium) Determine whether each of the fol- lowing statements is true, false, or uncertain. Then briefly explain each answer.

a.    In equilibrium, all sellers can find buyers.

b.    In equilibrium, there is no pressure on the market to produce or consume more than is being sold. c. At prices above equilibrium, the quantity exchanged exceeds the quantity demanded.

c.     At prices below equilibrium, the quantity exchanged is equal to the quantity supplied

14. (Changes in Equilibrium) What are the effects on the equilib- rium price and quantity of steel if the wages of steelwork- ers rise and, simultaneously, the price of aluminum rises?