A

1. What is meant by the expression "supply and price"?

2. How is price affected by demand? by supply?

3. How does price affect demand? supply?

4. Why do sellers have minimum prices?

5. How does each determine his minimum price?

6. Why do buyers have maximum prices ?

7. How does each determine his maximum price?

8. What are some of the different meanings of "market"?

9. Does the supply of a commodity include what is in the hands of the consumer?

10. Which buyers in a market cannot buy?

11. Which sellers cannot sell?

12. Why do many summer tourists like to go where no other tourists have gone?

B

1. Make a list of goods that advanced in price during the Great War and try to determine how these advances affected production.

2. Attach maximum prices to five articles you have recently purchased.

a. Compare these prices with the prices you paid.

b. Determine your approximate consumers' surplus on each purchase.

c. Would a lower price have caused you to buy more of any article than you did buy?

d. Did you feel the influence of other buyers?

3. Give examples from your own experience or observation of the four possible market conditions.

4. Mention the names of any articles you have seen sold at "cut prices." Discuss these sales under the following heads: a. Elasticity of demand.

b. Competition among sellers.

c. Competition among buyers.

d. Seasonableness.

5. How has your refusal to buy any article which was on sale affected the market price of that article?

C

1. During the winter of 1918-19, the statement was often made that the high wages per ton paid to miners during the preceding summer had tended to decrease rather than to increase the production of coal.

a. Assuming this statement to be correct: i. Why were wages increased?

ii. Why did not an increase in wages increase the coal output? iii. Can we conclude that wages vary inversely with output?

b. Assuming this statement to be incorrect: i. What caused it to be made? ii. Why did many people believe it to be true? iii. Why was it not refuted?

2. Analyze the medieval notion that in every exchange of goods one of the parties to the exchange lost exactly what the other party gained.

3. Explain how the market price of wheat would be determined under the following conditions:

Amount Offered		Price	Amount Demanded
10,000,000	bu..	$1.50 . . .	3,000,000	bu.
8,000,000	bu..	1.25 . . .	4,000,000	bu.
7,000,000	bu..	1.10 . . .	5,000,000	bu.
6,000,000	bu..	1.00 . . .	6,000,000	bu.
3,000,000	bu..............	.80 ..	. 8,000,000	bu.
1,000,000	bu.............	.60 ..	. 10,000,000	bu.

a. At what price will the greatest amount be bought and sold?

b. What effect will the market price have on consumption of wheat? on future production of wheat?

4. If competitive prices are determined by an equilibrium between demand and supply, how can a store maintain a "one-price system"?

5. "The price of pork has never gone as high as $2 a pound nor as low as ten cents a barrel." a. Why are there any fluctuations in price?

b. Why are the prices higher now (1919) than ten years before?

c. Are there any conditions under which the price of pork might fluctuate as much as suggested by the above statement?

d. What classes of people would buy pork if it were $2 a pound ?

What would other classes do?

6. Suppose at potato-digging time a gardener finds that the market price of potatoes is but twenty cents a bushel.

a. What would be his attitude toward storing potatoes?

b. If he stored his potatoes would he be a seller in the market ?

Explain.

c. Suppose he had no facilities for storing: i. Would he dig his potatoes? Why, or why not? ii. Might he sell them undug? How?

d. What would be his attitude toward the next crop of potatoes ?

e. Suppose he turns his attention to wheat-raising: i. What would be the possible effect on the future price of potatoes ? ii. How might the price of wheat be affected?

Supplementary Reading

Bullock, Introduction to the Study of Economics, 3d ed., pages 192-222.

Ely, Outlines of Economics, 3d ed., pages 164-182.

Fetter, Economics, Vol. I, pages 61-72.

Fisher, Elementary Principles of Economics, pages 268-353.

Johnson, Introduction to Economics, pages 36-42.

Seager, Principles of Economics, pages 109-122.

Seligman, Principles of Economics, 5th ed., pages 222-238.

Taussig, Principles of Economics, 2d ed., Vol. I, pages 138-158.