11 The graph input tool The graph input tool Some questions

11. The graph input tool The graph input tool Some questions allow you to interact indirectly with a graph by manipulating a corresponding table of entries. In this type of question, you will not be graded on the final appearance of the graph, but rather you will use the graph to help you answer the questions that follow. You can adjust the values in the accompanying table for fields with white backgrounds. Once you have selected a field, you can either enter a new value or adjust the existing value by selecting the arrows (to increase and to decrease). You can exit the entry field by hitting Enter (or Return) on your keyboard or by selecting a place elsewhere on the problem. To reset a field to its starting value, select the circular refresh arrow that appears next to the selected field Experiment with entering different values in the editable fields. Observe what changes take place on the graph itself and also in the uneditable fields in the table. Dont worry about understanding the economics behind the question, just make sure you understand how to manipulate the values on the graph Graph Input Tool Market for Wine 60 54 48 42 36 30 24 18 12 Supply Price (Dollars per bottle) 48.00 antity Supplied uantity Demanded bottles) 36 144 of housands of bottles) Surplus (Thousands of bottles) 108 Shortage Thousands of bottles) Demand Shifter Supply Shifter Poblia or prabe 50.00fun 6.00 Price of Grapes (Dollars per pound) (Dollars per bottle 0 18 36 54 72 90 108 126 144 162 180 QUANTITY (Thousands of bottles of wine)

Solution

When the Price of Champagne is 38 then the demand curve shift downward as there is a fall in the price of the substitute. The supply curve will remain unaffected. At price 48 there will be surplus of more than 108. For further information regarding values we need more information.

At Price 60 the demand will be zero and the supply will be 180. There will be a surplus of 180 and 0 shortage. It is evident from the graph.

When the Price of grape is 3 then the supply curve shift downward as there is a fall in the price of the input. The demand curve will remain unaffected. At price 48 there will be surplus of more than 108. For further information regarding values we need more information.