AB 204 STUDY Successful Learning / ab204study.com AB 204 STUDY Successful Learning / ab204study.com | Page 4

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 resources for potato production, there are fewer
resources available for catching fish.