Problems, Explanatory Material, etc.

Suggested that you thinik about these, bring your answers to class.  If you are unsure about the vocabulary, try your best.:

If demand increases and supply decreases, equilibrium price will necessarily rise and equilibrium quantity will necessarily remain the same.  True or false?  Think about this and draw a graph to help formulate an answer.

Say that the demand for tomatoes is given by   Qd = 600 -40P
and  the supply equation is   Qs = -100 +100P
What is the max. amount of tomatoes that can be sold if a price of $10 is charged?
What is the minimum price needed to induce producers to offer 200 tomatoes for sale?
What is the equilibrium price?

Suppose the (generalized) demand function for good X is
Qd = 8000 - 200Px - 50M -100Pr
where Qd is the quantity demanded of X
Px is the price of X
M is the average consumer income in thousands
Pr is the price of related good R
Answer these:  is good X normal or inferior?  are X and R substitutes or complements?