Suppose the market price is $ 5 . What problem would exist in the market ? Does it lead to surplus or shortage ? How do you expect this problem will affect the price ? Indicate this on the supply and demand graphs .
Assume the market price is currently $ 2 . What problem would occur in the market due to this price ? Will it be shortage or surplus ? What will its effect on the price ? Indicate this on the supply and demand graph .
2 ) Consider supply and demand schedules for Alaska Salmon indicated in the following tables to answers questions from a – d below .
Referring to the schedules of supply and demand , what is the equilibrium price of Salmon ? What is the equilibrium quantity of salmon demanded and supplied at the equilibrium price ?
Second , assume that Alaskan Salmon can also be sold in UK . The UK demand schedule for salmon is as follows :
Refer to the combined U . S . and UK demand schedule , the U . S . demand schedule and the supply schedule , and analyze the change in the market for salmon . What will happen to the price at which fishermen can sell salmon ? What will be the final output of salmon ?
After UK joins the market demand for salmon , what will happen to the price U . S . consumers pay for salmon ? What will happen to the quantity of salmon consumed by U . S . consumers ?
3 ) Assume Atlantis is a small , isolated island in the South Atlantic . The inhabitants grow potatoes and catch fresh fish . The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced . Obviously , given their limited resources and available technology , as they use more of their