26. At a price of $8, the quantity demanded in the entire market would be A. 0 l

Question

26. At a price of $8, the quantity demanded in the entire market would be

A. 0 lbs B. 4 lbs. C. 30 lbs. D. 34 lbs E. none of the above

27. If the price of loose-leaf tea rises from $4 to $6, the market quantity demanded would

A. decrease by 32 lbs.

B. increase by 32 lbs.

C. increase by 24 lbs.

D. decrease by 24 lbs.

E. none of the above.

28. Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?

A. D increases, S no change, P and Q decrease.

B. D no change, S increase, P decreases, Q increases.

C. S decreases, D no change, P increases, Q decreases.

D. D and S decrease, P and Q decrease.

E. D increases, S no change, P and Q increase.

29. If the United States lifts the embargo on Cuban products, what will happen in the U.S. market for Cuban cigars, holding all else equal?

A. The supply curve will shift to the right.

B. The demand curve will shift to the left.

C. The supply curve will shift to the left.

D. The demand curve will shift to the right.

E. Both A & D

*****PLEASE SHOW ME HOW YOU GOT THESE ANSWERS USING YOUR WORK**** Thank you.

The following table below shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. Use this table to answer questions 26 and 27. Loose Leaf Tea Price per lb (dollars) $8 Sunil's Quantity Demanded (Ibs) Mia's Quantity Demanded (lbs)Quantity Demanded Rest of Market 30 40 4 12 15 4 64 90

Explanation / Answer

26. D. 34 lbs
At price of $8, quantity demanded by Sunil is 4 lbs, quantity demanded by Mia is 0 lbs, and  quantity demanded by rest of the market is 34 lbs. So, total quantity demand in the entire market at $8 is sum of quantity demanded by Sunil, quantity demanded by Mia, and  quantity demanded by rest of the market. So, total quantity demand in the entire market at $8 = 4 lbs + 0 lbs + 30 lbs = 34 lbs.

27. A. decrease by 32 lbs.
At price of $6, quantity demanded by Sunil is 7 lbs, quantity demanded by Mia is 2 lbs, and  quantity demanded by rest of the market is 40 lbs. So, total quantity demand in the entire market at $6 is sum of quantity demanded by Sunil, quantity demanded by Mia, and  quantity demanded by rest of the market. So, total quantity demand in the entire market at $6 = 7 lbs + 2 lbs + 40 lbs = 49 lbs.
Similarly, At price of $4, quantity demanded by Sunil is 12 lbs, quantity demanded by Mia is 5 lbs, and  quantity demanded by rest of the market is 64 lbs. So, total quantity demand in the entire market at $4 is sum of quantity demanded by Sunil, quantity demanded by Mia, and  quantity demanded by rest of the market. So, total quantity demand in the entire market at $4 = 12 lbs + 5 lbs + 64 lbs = 81 lbs.
Thus, If the price of loose-leaf tea rises from $4 to $6, the change in quantity demanded in the market is the difference of  total quantity demand in the entire market at $6 and total quantity demand in the entire market at $4 = 49 lbs - 81 lbs = - 32 lbs. So, as indicated by the negative sign quantity demanded decreases by 32 lbs.

28. E. D increases, S no change, P and Q increase.
Due to the announcement, consumption of walnuts will increase which implies there will be an increase in the demand for walnuts. Thus, D increases. But supply will not be affected due to the announcement as it only impacts consumption. So, there is no change in S. With increase in D, and no change is S, P will incresae and also due to increase in consumption, Q will increase. (This can be seen in graph as well. When Demand curve increases and shifts rightward whereas S remains constant then both equilibrium quantity and price increases.)

29. A. The supply curve will shift to the right.
The question implies that ban has been removed on cuban products, so its supply will be affected. And since it is easier to supply more Cuban cigars because of the lifting of the ban so the supply will increase and thereby the supply curve will shift to the right.

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