Questions of the Day
Supply & Demand

1. The following information was gathered from a survey of the Pizza buying habits of URI students. They were asked how many pizzas they would buy at different prices.

1. Please convert this information into a graph.
2. How many pizzas do they want to buy at a price of 8?
3. What would happen to the curve if demand increased by 5?

2. A recent article in The Wall Street Journal discussed the trend in home sales. Last year there were record sales of 5.1 million new and used houses despite the fact that there was a 10 percent rise in the median price of new homes. At the time, the median price of homes was $53,500. Given your knowledge of the market system, can you explain this puzzling result - a positive relationship between the change in price and the quantity demanded? (Ignore inflation.)

3. You are to find a headline in a newspaper or magazine that is related to price changes and convert the words in the article to a supply-demand graph.  You may use a hard copy source, or you may decide to try an on-line article from the Market Information on the Data Sources page.  

4. Develop a S&D diagram to describe the impact on the:

1. price of oil of the decision to allow IRAQ to begin selling oil in the world market
2. market for iMac portable computers of a favorable review in the Wall Street Journal
3. market for middle management of downsizing in American companies
4. market for RI homes of a very strong RI economy
5. market for nursing homes of the aging of the baby boomers
6. market for home computers of technological advances that produce substantial decreases in the cost of computing power

5. Use a supply-demand diagram to demonstrate the following situations:

1. recession's impact on the market for domestic automobiles
2. impact of drought on the cereal market
3. impact of mechanization in agriculture on the market for grains
4. impact on the market for oil of OPEC's decision to restrict oil output
5. impact on the market for oil of a worldwide recession
6. impact on the market for U.S. grain of the slowdown in the Asian economies during the crises of 1997-98
7. impact of rising enrollments at URI on rents in the Kingston area
8. impact on future housing prices of the aging of the baby boom

6.  Demonstrate with a S-D diagram:

1. market where supply is perfectly elastic
2. the existence of scalpers at the World Series games
3. empty seats at a recent Broadway play
4. impact of rent control on market for apartments in NYC

7. In 1996, after a very heated debate, we raised the minimum wage in the US. Some argued that the increase would seriously reduce employment, while others argued that there would be little reduction in employment. Please develop a diagram in which you show how these differences can be shown as differences in the supply and/or demand curves.