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Microeconomics questions about Supply, Demand, Equilibrium

The questions are in the attachment files 1 and 2.

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Question 1

Define or explain the following economic terms:

a) Quantity demanded
b) Quantity supplied
c) Market equilibrium
d) Consumer surplus
e) Price elasticity of demand

Question 2

By using the midpoint formula, calculate the price elasticity for each of the following changes in demand by a household.
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Demand for P1 P2 Q1 Q2
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(a) Long-distance phone service $0.25 per min. $0.15 per min. 300 min. 400 min.
per month per month

(b) Orange juice 1.50 per qt. 1.90 per qt. 14 qt 12 qt
per month per month
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Question 3

Do you agree or disagree with each of the following statements? Briefly explain your answers.

(a) The price of a good rises, causing the demand for another good to fall. The two goods are therefore substitutes.
(b) If demand increases and supply increases at the same time, price will clearly rise.
(c) A shift in supply causes the price of a good to fall. The shift must have been an increase in supply.
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Attachments

Solution Preview

Please see the attached files for the complete solution:

Define or explain the following economic terms:

a) Quantity demanded

The total amount that an individual or a group of individuals would choose to buy at a particular price

b) Quantity supplied

The total amount of a good or service ...

Solution Summary

The solution includes excel and word files that defines some microeconomics terms as well as a solution to a problem asking for equilibrium quantity and price together with a graph.

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