ECO100Y1 Study Guide - Quiz Guide: Economic Equilibrium, Demand Curve
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DEPARTMENT OF ECONOMICS ECO101: FALL 2017
UNIVERSITY OF TORONTO PETER FOLTIN
Tutorial 2: Competitive Markets
1. Demonstrate that competitive markets tend to equilibrium over time without any
external guidance or co-ordination between buyers and sellers.
2. See how shifts in demand or supply affect equilibrium outcomes.
3. Have some fun!
How to Prepare for Tutorial:
We will be playing a game in tutorials this week. To prepare (and help you play better), I
1. Complete the questions below.
2. Review the instructions for MobLab’s competitive market game:
Pre-Tutorial Prep Problems
Note: not all problems will be taken up in tutorial; nor will solutions for these problems be
1. The Market for Oranges: Assume the market demand curve for oranges is
and the market supply curve for oranges is
What is the
equilibrium price and quantity in this market.
2. Assume that the market price of bananas decreases.
a. Will this affect the market demand for oranges? Why or why not?
b. Will this affect the market supply for oranges? Why or why not?
c. What do you predict will happen to the equilibrium price and quantity of
3. Suppose the inverse market demand curve for oranges becomes
and the inverse market supply curve for oranges is
. Find the new equilibrium price and quantity for oranges.
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