Economics homework ... HELP !!?

Question

Refer to the graph below http://webclass.lakeland.cc.il.us/blynch/DEMANDCURVE.htm Along the demand curve, in what direction does quantity demanded move?

a. In an unpredictable direction, according to this graph

b. In the opposite direction as a change in price

c. In a direction not necessarily related to a change in price

d. In the same direction as a change in price.

Refer to the graph below http://webclass.lakeland.cc.il.us/blynch/SHORTAGEEQUILIBRIUM.htm Which market price results in a shortage?

a. 100

b. 75

c. 125

d. all of the above

Suppose there is an increase in the cost of using ink, what do you predict will happen to the tattoo market?

a. a shift to the left of the demand curve

b. a shift to the right of the demand curve

c. a shift to the left of the supply curve

d. a shift to right of the supply curve

Answer 1

b)In the opposite direction as a change in price

because there is an inverse r/s between price and quantity demanded

b) 75

because the quantity demanded at this price is greater than the quantity supplied

c) supply shift to the left

ink is a factor of production of tattooing

Answer 2

Question 1) Answer is B.  If you look at the graph, this is the same as saying, as the price goes lower, more people will be willing and able to pay for the good.  Think if the price of gasoline suddenly went down to $2 a gallon again.  Everyone would be scrambling to buy as much as they could!

Question 2) Answer is B again.  If the price is $75, the quantity demanded will be 20.5, but the quantity supplied will be 18.5.  You can tell by looking at where the dotted line of the price intersects the supply curve and the demand curve.

Question 3) Answer is C.  If the cost of an input increases, producers will cut back production, which is the same thing as shifting the supply curve to the left.  (The effect is that for the same amount of money, you get less stuff.  Or, conversely, the same amount of stuff costs more money.)

I hope these explanations don't just give you the right answers, but also help you understand why those are the right answers!  Good luck scholar!