2. What happens to price and quantity in the market for cigarettes, when:a. A cure for lung cancer is found.b. A government ban of smoking in restaurants.c. The University of North Carolina invents a fertilizer that increases tobacco yieldper acre.d. The price of lighters and matches increases.

a) Since a cure for lung cancer is found, people will be less bothered about their health problems…

Answered: 2. What happens to price and quantity…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 4
Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign. Using the midpoint method, the elasticity of demand for headsets is about (.44/1.14/2.28/4.56)
Show necessary and appropriate steps. No credits will be given to answers without showing necessary calculations and/or explanations. 1. Consider the markets for DVD movies, TV screens, and tickets at movie theaters. a. For each pair, identify whether they are complements or substitutes: DVDs and TV screens DVDs and movie tickets TV screens and movie tickets b. Suppose a technological advance reduces the cost of manufacturing TV screens. Draw a diagram and explain what happens in the market for TV screens.
1. most people demand goods and services much less than they want. True or false? Explain your answer. 2. How might the price of wheat affect the supply of rice?
If the quantity demanded is less than the quantity supplied, then:A. the price will have to increase to establish equilibrium.B. there will be an excess supply of goods.C. the demand will shift to the right.D. there will be a shortage of goods.
The price per kilo of sugar is expected to increase next week. What will happen to the demand for sugar today. a. Increase in quantity demand today b. shift to the left of the supply curve next week c. shift to demand curve to the right next week d. Increase in the quantity supplied today
1. What will happen in the market for wine if the price of cheese increases (wine and cheese are complements)? 2. What will happen in the market for brewed coffee if the price of coffee beans increases? 3. What will happen in the market for lobster if the government rises the income tax and lobsters are a normal good? 4. What will happen in the market for tomatoes if a new study is released that shows that pesticides used on tomatoes contain cancer forming agents. 5. A fall in airfares from UK has raised the demand for hotels rooms in St. Vincent. 6. Government grants a $1 subsidy on each bottle of milk produced. 7. Government collects a $2 sales tax on each bottle of rum.
1. Which of the following is true of any market? a. The interaction of demand and supply determines the price and quantity in that market. b. There must be a supply of the item but not necessarily a demand for the item. c. Demand and supply are always equal for an item. d. There must be a demand for the item but not necessarily a supply of the item. e. The market will always be in equilibrium 2. During the fall of 2015, many vacationers on cruise liners became ill while on board their ships. Consequently, there was a a. Decrease in the quantity demanded of cruise vacations but no change in the demand for cruise vacations. b. Decrease in the demand for cruise vacations. c. Increase in the quantity supplied of cruise vacations but no change in the supply of cruise vacations. d. Increase in the supply of cruise vacations. 3. Which of the following statements is false? a. As more buyers enter the market, the market demand curve shifts to the right. b. As income falls, the…
Chewing gum is considered an inferior good. What would happen to the equilibrium price and quantity of chewing gum if income increased and more firms started producing chewing gum? Equilibrium price will A. go up and equilibrium quantity will go up. B. be indeterminate and equilibrium quantity will go up. C. go up and equilibrium quantity will go down. D. go down and equilibrium quantity will be indeterminate.
Which would cause a decrease in the quantity of computers supplied? A. An increase in the demand for computers B. A decrease in the demand for computers C. An increase in the incomes of consumers D. A decrease in the price of parts for making computers
How would you work this?
9. The state of Minnesota rations camping sites on a first come, first served system. This has led to what America did during World War II. Venezuela to distribute food which is to what Minnesota does to and is a. An increase in the demand for camping sites and a decrease in supply; not similar; relies; prices; similar b. A surplus of camping sites and downward pressure on prices; similar to; does not rely; non-price rationing; similar I The state failing to maximize revenue from this shortage-creating system; similar to; does not rely; prices; similar d. The opportunity cost of wasted time for many would-be campers; similar to; refuses to rely; the invisible hand; similar C and D only. C. on with camping sites. e.

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