Name: _________________________________ Section: __________

Economic development: Prelim Quiz (Demand, Supply Equilibrium)

Situational Problem:

1. Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn
to pork as substitute for beef. How will you explain and illustrate this change in the beef market in
supply and demand terms?

The supply curve for beef should shift leftward or upward to reflect the drought. Because the
quantity consumed to decrease because the price of beef is rising.

2. In December, the price of Christmas trees rises and the number of trees sold also rises. Is this a
violation of the law of Demand? Explain

No. this is not simply a move along the demand curve. We all know that December is a
season of Christmas that’s why Christmas trees rises, causing the curve to shift to the right. Both the
price of Christmas Trees and the quantity sold of Christmas trees to rise because its Christmas season.

3. A firm charges Php 8000 for its unique processor. If the total revenue is Pho560000 in July, how many
word processor will be sold that month?

Q= 560000/8000

Q= 70

4. The government places a tax on rubber. What will happen to the market for car tires?

The price of car tires will be increases due to the tax that government provide.

4. Consider a market supply and demand represented by the following;

Qd = Qs

Qs = 4P – 120

Qd = 1000 – 10P.
Calculate the equilibrium price and Quantity and plot in a graph.

Qd= 1000-10P, Qs= 4p-120

D= 1000 + 120= 1120

S= 4+10= 14

1120/14= 80P

D=1000-10(80)

1000-800=200

S= 4(80)-120

320-120=200

Equilibrium=200

When we compute the equilibrium price it shows that the answer is 200.