(Solved): 2. The graph below shows the supply and demand curve for a particular good. Price 900 800 700 600 5 ...

2. The graph below shows the supply and demand curve for a particular good. Price 900 800 700 600 500 400 300 200 100 0 0 20 40 60 Quantity Supply Demand 80 100 Use this graph to answer the four parts to this question on the following page: a. Is the quantity demanded positively or negatively related to price? Is the quantity supplied positively or negatively? How can you tell? b. At a price of $200, what is the quantity demanded? What is the quantity supplied? (HINT: See what quantities the demand and supply curve correspond to at this price). c. At a price of $600, what is the quantity demanded? What is the quantity supplied? d. At what price is the quantity demanded equal to the quantity supplied? What quantity does this correspond to? 1. The Table below shows the number of cups of coffee Chuck buys at various prices. Initially, Chuck has income of $20,000 per year. Price per cup of coffee Quantity of coffee demanded 23205 $$ $3 2 cups 4 cups 6 cups 8 cups 10 cups a. Plot and connect the ordered pairs on a graph with "Price" on the y-axis (or the vertical axis) and "Quantity" on the x-axis (or the horizontal axis) As stated in the text, the "Slope" of a line measures how much the variable on the y-axis changes in response to a change in the variable on the x-axis. Thus, slope, where the Greek letter "A" means "change in". Using a graph like you just drew, you can easily Ay first y coordinate-sec ond y coordinate calculate the slope by: slope Ax first x coordinate-second x coordinate formula to answer the next two parts of the question: .Use this b. What is the slope of Chuck's demand curve for cups of coffee in the price range of $5 and $4? e. What is the slope of Chuck's demand curve for cups of coffee in the price range of $2 and $1? d. Is the price of coffee and Chuck's quantity demanded of coffee positively or negatively related? How can you tell? e. If the price of coffee moves from $2 per cup to $4 per cup, what happens to quantity demanded? Is this a movement along a curve or a shift in the curve? Price per cup of coffee $5 $4 $3 $2 SI f. Suppose Chuck is awesome at what he does for a living, which causes his employer the double his income to $40,000 per year. Now, the following ordered pairs describe Chuck's demand for cup. Plot these ordered pairs on the graph you drew for part (a). Quantity of coffee demanded 4 cups 6 cups 8 cups 10 cups 12 cups g. Did the doubling of Chuck's income cause a movement along his demand curve or a shift in his demand curve? Does Chuck drink more or less coffee now that his income increased? How can you tell?