PADOHILAO, JUSTINE T.

BSA-1A

MANAGERIAL ECONOMICS

PROFESSOR: MISS LEAH SALMORIN

 QUESTIONS
WOOL: AN OPENING EXAMPLE

A.) Yes, because the supply curve for wool is increase in the price of a wool used in the good’s
production.

B.) Yes, the shift demand curve for wool to the left because Chinese and Russians cut back their
purchases of wool therefore the curve will be decreased.

C.) It is necessary to prevent the price from falling so that could not propped up their products of
wool.

D.) The actual price of wool fell to about $2.50 per pound because the Australian buy up so much wool
that its cash reserves and credits.

 TRUE OR FALSE

1. True

2. True

3. True

4. True

5. False

 MULTIPLE CHOICE

1. C

2. B

3. D

4. C

5. A
  PROBLEMS
1. Based on unofficial estimates by economists at the U.S Department of Agriculture, the market
demand curve for wheat in the American market in the early 1960s was (roughly) as follows:

Farm price of Wheat Quantity of Wheat demanded

(dollars per bushel) (millions of bushels)
1.00 1,500
1.20 1,300
1.40 1,100
1.60 900
1. 80 800
2.00 700

FARM OF WHEAT IN EARLY 1960s

FARM PRICE OF WHEAT

 2.5

1.5

0.5

0
1,500 1,300 1,100 900 800 700

QUANTITY

In the middle 1970s, the market demand and supply curves for wheat in the American market were
(roughly) as follows:

Farm price Quantity of wheat Quantity of wheat

Of wheat demanded (millions supplied ( millions
(Dollars per bushels) of bushels) of bushels)
3.00 1,850 1,600
3.50 1,750 1,750
4.00 1,650 1,900
5.00 1,500 2,2004

FARM WHEAT in the

MIDDLE 1970s
 Chart Title
6

0
1,850 1,750 1,650 1,500 1,900 2,200

Series 1 Series 2

Quantity

A.) The farm price of wheat in the middle 1970s would been greater because the curves of the wheat
supplied increase in the middle of 1970s, therefore the price of wheat is in $3.50.

B.) Yes, the shift occurs between the early 1960s and the middle 1970s because demanded curve to the
left so the factor may have been prices.

C.) A market surplus is the excess supply that is the quantity supplied is greater than quantity
demanded.

2. Assume that the quarterly demand and supply functions for personal computers are

Qd= 340- 6P

Qs= 100+ 2P

Where the price is in $100 of 2001 dollars and quantity is in thousands of units.

a.) Qd= 340- 6($100)

= 340- $600

= - $260

Qs= 100+ 2($100)

= 100+ $200

= $300
b.) In shortage excess supply or demand of personal computers. The demand will be $320.5 and the
supply is $106.5 would be the large of the personal computers.