ECO10004: ECONOMIC PRINCIPLES

WEEK 3_TUTORIAL QUESTIONS

Student: Van Ngoc Tuan Kiet – SWS00158

Question 1:
a.

b.
As we can see from the chart above, the number glass of lemonade that
are bought increase when the price level reduces. That means the
quantity demanded increase when decreasing the price level and the
quantity demanded decrease when the price is up.
c.

d.
The difference between two graphs above is the change of quantity
while the price does not change. The reason for this is change of
demand when the weather is cool and overcast. Therefore, not many
glass of lemonade can be sold if the price stays unchanged.
Question 2:
a.

b.
The equilibrium price is 6$ at the quantity of 1600 drinks for the “Boost
juice”
At the price 4$, the demanded quantity is 2000, higher than the
supplied quantity which is 1500. Therefore, the price increases into 6$
to make profit, which decrease the demand and increase the supply.
And 1600 is the is the equilibrium point for this kind of drink.
c.
If the “Boost juice” stood in 12$ initially, the demand was 400 and the
supplied quantity was 1900, which was excessive and caused the
imbalance between supply and demand. At that point, there was a
surplus in quantity of supplied drink.
d.
If the price for “Boost juice” was 4$ at first, the maximum number of
drinks can be produced was 1500 and the demand of customers was
2000. Therefore, the supplied quantity is shortage at this point.

Question 3:
a.

After the storm, many pineapple was destroyed so there was a shift in
supply curve. The movement from Supply 1 to Supply 2 like the picture
above because the supply is lack while the demand is unchanged.
b.
Due to the storm, the number of pineapples after yielding is
underestimated, while the demand for this kind of fruit stay
unchanged. Therefore, the price will be increase as high as possible.
That’s why many pineapple farmers who the crop was safe after storm
got more profit.
c.

In this case, the bananas is considered a substitute of pineapples due to

the shortage of pineapples after disaster. Therefore, the supply of
bananas is unchanged while the demand for replacing pineapples
increase.

Question 4:
a.

The demand would shift from D1 to D2 because people’s psychology of

lacking toilet paper when the Covid-19 disease broke out at that time.
b.
Initially, the price wouldn’t change too much and the quantity of toilet
papers would reduce. Then the price would peak at P2 and the quantity
of demand would reach D2. That means both price and quantity of
toilet papers in Australia rises.
c.

The policies of supermarket lead to a shift from S1 to S2, which increase

supply of toilet papers in Australia. As a result, the price falls from P1 to
P2 and the quantity rises from Q1 to Q2 to be equal.