Supply

Problem 1.1: Tom's supply equation for selling handmade mugs is as follows:

Q = 5 + 1.5P

How many mugs will he sell if the price is $2 a mug? What if the price is $4 a mug? [Solution]

Problem 1.2: Tom's supply equation for his handmade mugs is now:

Q = -5 + 2P

At what price will he no longer be willing to sell mugs? [Solution]

Problem 1.3: If Jean's supply curve for babysitting looks like this:
What is the minimum amount you would have to pay her if you wanted her to babysit for 2 hours? 5 hours? (Remember that wage is the hourly rate of pay). [Solution]

Problem 1.4: Jeff and Luke both sell baseball cards. Jeff's supply function is

Q = 2P

Luke's supply function is

Q = -5 + 3P

If you wanted to buy 50 cards total, how much would you have to offer per card? At what price will Jeff no longer sell any cards? At what price will Luke no longer sell any cards? [Solution]

Problem 1.5: Jody owns a used CD store, where she buys and sells used CDs. Which of the following will cause a movement along her supply curve, and which will cause a shift in her supply curve?

a) Another CD store opens down the street that also buys used CDs, so she now has to pay more for the used CDs before she can sell them again.
b) The landlord now includes utilities in her rent payment, so she no longer has to pay for electricity.
c) There is an Elvis revival, and the market price of used Elvis CDs goes up. [Solution]