ib-economics-quantitative

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EQUILIBRIUM PRICE AND QUANTITYYou need to be able to: Calculate the equilibrium price and equilibrium quantity from linear demand andsupply functions.Plot demand and supply curves from linear functions, and identify the equilibriumprice and equilibrium quantity.State the quantity of excess demand or excess supply in the above diagrams.Calculating Equilibrium Price and QuantityIn order to do this, we need to find where Q D = Q S .The steps are as follows:1. Take the two functions that you are given and substitute Q D and Q S from them into anequilibrium equation.E.g. Q D = 200 – 4P and Q S = 4PSo:200 – 4P = 4P2. Solve the equation for P and this gives the equilibrium price.E.g. 200 – 4P = 4P200 = 8P200 = P825 = P3. Substitute P into either of the demand or supply functions and solve for Q.E.g. Q D = 200 – 4PQ D = 200 – (4 x 25)Q D = 200 – 100Q D = 1004. You can check this by solving for Q in the function that you did not use the first time.E.g. Q S = 4PQ S = 4 x 25Q S = 100Now you have a go!Question 1.3In the market for toothpaste, the demand function is Q D = 2000 – 200P and the supplyfunction is Q S = -400 + 400P, where price is given in $ per tube of toothpaste and quantity isgiven in thousands of tubes of toothpaste per month. Calculate the equilibrium price andquantity.Question 1.4In the market for chocolate bars, the demand function is Q D = 900 – 100P and the supplyfunction is Q S = 200P, where price is given in $ per chocolate bar and quantity is given inthousands of chocolate bars per month. Calculate the equilibrium price and quantity.Produced by Ian Dorton & Jocelyn Blink Page 8
Question 1.5On the graphs below, plot the curves for questions 1.3 and 1.4 above and identify theequilibrium prices and quantities. Fully label the diagrams.Produced by Ian Dorton & Jocelyn Blink Page 9
Page 1 and 2: IB HIGHER LEVEL ECONOMICSQUANTITATI
Page 3 and 4: Topic 1 - Linear Demand and Supply
Page 5 and 6: Have you fully labelled the axes?Ex
Page 7: Now you have a go!Question 1.2On th
Page 11 and 12: Topic 2 - ElasticitiesPrice Elastic
Page 13 and 14: Cross Elasticity of Demand (XED)You
Page 16 and 17: Topic 3 - Specific Taxes and Subsid
Page 18 and 19: Now you have a go!Question 3.1In th
Page 20 and 21: Substitute $4 as P in either equati
Page 22 and 23: SUBSIDIESPlot demand and supply cur
Page 24 and 25: The original producer surplus was t
Page 26 and 27: 2400 = 600PP = $4Substitute $4 as P
Page 28 and 29: Topic 4 - Price ceilings and price
Page 30 and 31: Now you have a go!Question 4.1In th
Page 32 and 33: Step 3Calculate from the diagram th
Page 34 and 35: Marginal product =In the table abov
Page 36 and 37: E.g. The firm below has revenues ba
Page 38 and 39: E.g.(2) The firm below has the foll
Page 40 and 41: ) Firm BQuantity Price AVC ATC300 $
Page 42 and 43: Produced by Ian Dorton & Jocelyn Bl
Page 44 and 45: Topic 12 - Comparative AdvantageYou
Page 46 and 47: Now you have a go!!Question 12.1Usi
Page 48 and 49: 1. Add the world supply curve if fo
Page 50 and 51: 3. Calculate the amount of revenue
Page 52 and 53: Now you have a go!!Question 13.1In
Page 54 and 55: Question 13.3In the market for bott
Page 56 and 57: i. Make a table to show the demand
Page 58 and 59:
Topic 15 - Balance of paymentsYou n
Page 60 and 61:
Question 15.1An extract from the ba
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