5. Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a decrease ininput prices to produce this good. What would we expect to occur in this market?a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.c. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.d. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

Given: Increase in the income of buyers in a market for a normal good. Decrease in the input price…

Answered: 5. Suppose that the incomes of buyers…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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d. Suppose there is an increase in consumers' incomes. In the market for automobiles(a normal good), does this event cause an increase in demand or an increase in quantitydemanded? Does this cause an increase in supply or an increase in quantity supplied?(Explain. NB: Explanation must not be more than half a page.)e. Suppose there is an advance in the technology employed to produce automobiles. Inthe market for automobiles, does this event cause an increase in supply or an increasein the quantity supplied? Does this cause an increase in demand or an increase in thequantity demanded? Explain NB: Explanation must not be more than half a page.f. The demand and supply functions for two related commodities A and B in two differentmarkets are defined below:QdA= 410-5PA-2PB QdB= 295-PA-3PBQsA= -60+3PA QsB= -120+2PBi. Find the equilibrium conditions in the two marketsii. How are goods A and B related? Explain your.
12. What is the difference between a change in supply and a change in quantity supplied? A (change in supply) or to the right (an increase in supply). A change in supply, therefore, is a change in the entire supply schedule or curve. ) is a shift in the entire supply curve either to the left (a decrease in In contrast, a ( change in schedule from one price-quantity combination to another. A change in product price causes the change in quantity supplied. ) is a movement along an existing supply curve or PA P (Increase, Decrease) in (Increase, Decrease) in
Assume that you are told that because of some changes, the equilibrium price increased but it is unknown if the equilibrium quantity increased, remained the same, or decreased. Which of the following would be consistent with this outcome?a. There was a decrease in input costs and consumers expected lower income.b. Consumers expected a lower price and firms expected a higher price.c. There was a decrease in income (the good is inferior) and a decrease in the number of firms.d. There was a positive change in consumer tastes and an increase in productivity. When demand is _______ consumers are _______ to price changes and the price elasticity of demand is _______.a. elastic, relatively sensitive, greater than one (in absolute value)b. inelastic, completely insensitive, equal to one (in absolute value)c. inelastic, relatively sensitive, less than one (in absolute value)d. unit elastic, hyper-sensitive, equal to zeroe. perfectly elastic, hyper-sensitive, equal to one (in absolute value)…
2. Explain what will be the result of cheaper sugar used in production of cakes at Bread Talks. What factor is this? Draw the graph and show the change. 3) Discuss the results of an increase in the price of crude oil for production of petroleum. Discuss how supply and price of petroleum will be changed? What factor is this? Draw the graph and show the change. Ⓒ If the price of chicken increases, discuss the changes in the market demand for beef. What factor is this? Draw the graph and show the change.
1. Suppose an increase in consumers' income causes a decrease in the demand for chicken and an increase in the demand for potatoes. Which good is inferior and which is normal? How will the equilibrium price and quantity change for each good?2. If the demand and supply curve for dishwashers are:D = 200 – 8P, S = 32 + 6PWhere P is the price of dishwashers, what is the quantity of dishwashers bought and sold at equilibrium?3. Markets tend toward equilibrium and, as a result, will tend to eliminate shortages and surpluses. Why?4. What is the difference between a shift of the demand curve and movement along the demand curve? Make sure to explain what determinants can cause a shift and movement along the demand curve.5. Explain the impact of:a. A rent ceiling set below the equilibrium price.b. A price floor set above the equilibrium price.
What happens when Tropical Storm Edna produces heavy rains that destroy a significant portion of the orange crop? What is the effect of this tropical storm on the EQUILIBRIUM PRICE of oranges? A. Equilibrium price will DECREASE as a result of this tropical storm. B. Equilibrium price will INCREASE as a result of this tropical storm. C. Equilibrium price will REMAIN THE SAME as a result of this tropical storm. What is the effect of this tropical storm on the EQUILIBRIUM QUANTITY of oranges? A. Equilibrium QUANTITY will DECREASE as a result of this tropical storm. B. Equilibrium QUANTITY will INCREASE as a result of this tropical storm. C. Equilibrium QUANTITY will REMAIN THE SAME as a result of this tropical storm.
1. Suppose you are selling t-shirts at your own t-shirt stand. The supply and demand curves for t-shirts are given below. P= 10 + 0.2 Q P= 20 – 0.2 Q a. What is the equilibrium quantity for t-shirt Number b. What is the equilibrium price for t-shirts? Number If the process of making your t-shirts results in chemical waste that you dump in a nearby stream, creating $ 8 worth of damage to the environment per shirt, what is the socially optimal number of t-shirts for you to sell? C. Number d. Given the chemical waste in part c., what is the socially optimal p Number e. What tax policy could the government use to assure that you sell the socially optimal number of t-shirts? for List
The data in the table above represent the market demand and supply for strawberries over a range of prices. Price(Cents) Quantity Demand(Million tin/ year) Quantity supplied(Million tins/year) 10 90 30 20 80 50 30 70 70 40 60 90 50 50 110 4.Define the equilibrium of a market. Find the equilibrium price and quantity. 5.Suppose that an increase in consumers’ income results in an increase of strawberries’ demand.The demand of strawberries rises by 30 million tins/year at each price level. Find the new equilibrium price and quantity.
Indicate the effect (increase, decrease or indeterminate) on the equilibrium price and quantity of each of these changes in demand and/or supply. A. Increase in demand, increase in supply 1. 2. B. Increase in demand, decrease in supply 3. 4. C. Decrease in demand, decrease in supply 5. 6.
3. Graphically illustrate the each of the following and note the change in price and equilibrium quantity: a. An increase in consumer incomes when the good is inferior (ceteris paribus). b. An increase in the cost of inputs of supply (ceteris paribus). C. A simultaneous increase in demand and supply.
14. The graph below shows supply and demand curve shifts for the propane market. (Propane is used to heat homes.) Which combination of events would produce the observed shifts in supply and demand and the resulting effects on market price P* and quantity Q*? G₂ in a. The supply of propane increases because of more efficient production techniques, and the demand for propane decreases due to warm winter weather. b. The supply of propane decreases because of a pipeline explosion, and the demand for propane increases due to cold winter weather. c. The supply of propane increases because of more efficient production techniques, and the demand for propane increases due to cold winter weather. d. The supply of propane decreases because of a pipeline explosion, and the demand for propane decreases due to warm winter weather.
55. Table 3.9 illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: a. The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. b. A new study says that eating cheese is good for your health, so that demand increases by 20% at every price. Price per Pound Qd Qs $3.00 750 540 $3.20 700 600 $3.40 650 650 $3.60 620 700 $3.80 600 720 $4.00 590 730

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