Easy Supply and Demand Economics HW

Need this done by today, any takers?

HOMEWORK #4P

DEMAND & SUPPLY

a) You are a Texas gasoline refiner. Draw the market for gasoline. Show the equilibrium, equilibrium price and equilibrium quantity. Be sure to label!

b) Hurricane Katrina blew through the Gulf and knocked several refineries offline so they can’t produce gasoline. Draw what happens in the U.S. gasoline market. Explain what determinant is operating and how. What happens to equilibrium price and quantity?

c) For a science fair project, a 7th grade student discovers how to make cars run on grapefruit juice. Draw what happens in the U.S. gasoline market. Explain what determinant is operating and how. What happens to equilibrium price and quantity?

d) Draw what happens in the U.S. grapefruit market. Why? What happens to equilibrium price and quantity?

e) Draw what happens in the U.S. auto market as a result of b). Explain what determinant is operating and how (hint: think what relationship are cars and gasoline). What happens to equilibrium price and quantity?

f) After c), consumers discover that grapefruit juice fumes in cars using grapefruit juice as fuel make the drivers lose weight and feel really, really happy. At the same time, car manufacturers get a $1,000 bonus per car from the government for each car manufactured using grapefruit juice as fuel because it helps the environment. Draw what happens in the U.S. auto market (which includes grapefruit juice cars). Explain what determinants are operating and how. What happens to equilibrium price and quantity?

g) When c) happens, the government imposes a price ceiling on grapefruit prices at the existing price level before any changes happen to the grapefruit market. Draw what happens in the U.S. grapefruit market when d) happens with the price ceiling. What condition exists in the market and what quantity is actually traded?