5. Illustrate in appropriate diagram (change in demand or change in supply) the impact on the good or service of the following events: A. Nominal income of consumers rise and potatoes are considered inferior goods B. Buyers of gold expect that the price of gold will decrease in the near future C. Producers of gold expect that the price of gold will rise in the near future

5. Illustrate in appropriate diagram (change in demand or change in supply) the impact on the good or service of the following events: A. Nominal income of consumers rise and potatoes are considered inferior goods B. Buyers of gold expect that the price of gold will decrease in the near future C. Producers of gold expect that the price of gold will rise in the near future

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Because of favorable weather and increased fertility of land, there is a bumper production of Cauliflower in Winter. Even though it is available almost all year, during its peak season the demand for Cauliflower goes up than regular. If a rise in supply of Cauliflower exceeds the rise in demand, then what should we expect in the Cauliflower Market? Explain with the help of a graph. (7.5 marks)
3. What happens to the good-market equilibrium output if the following event oc- curs in the economy? Briefly explain how it affects the relevant component(s) of planned spending. (a) The interest rate for treasury bills rises while people's expectation of infla- tion rate is constant. (b) The government decided to cut taxes. (c) The information-asymmetry problem worsened. (d) Investors become more optimistic about the future so that their autonomous investment increases.
Quantity Demanded (millions) Quantity Supplied (millions) Price (S) Year 1 Year 2 Year 1 Year 2 30 80 95 140 125 26 90 105 135 120 22 100 115 130 115 18 110 125 125 110 14 120 135 120 105 10 130 145 115 100 Between years 1 and 2, the demand curve has shifted to the the supply curve has shifted to the as a result, the equilibrium price is and the equilibrium quantity is a. Left; right; lower; higher. b. Right; left; higher; lower. C. Left; right; higher; lower. d. Right; left; lower; higher. e. Left; left; higher; lower.
8. Suppose a city places a "green - belt" area around itself that effectively kills any future development. What will happen to current housing rental rates, future housing rental rates, and the current price of housing? Explain using a supply and demand graph.
7. Movements along versus shifts of supply curves Consider the market supply of peanut butter. Complete the following table by indicating whether an event will cause a movement along the supply curve for peanut butter or a shift of the supply curve for peanut butter, holding all else constant. Event Movement Along Shift An increase in the price of labor (used in the production of peanut butter) A decrease in the price of peanut butter A change in technology that makes it less costly to produce peanut butter
(Figure: Shift in Supply 2) Use the figure to answer the question. Price New supply 7% Old supply Quantity Which market change would lead to a shift of the supply curve fromOld supplytoNew supply? O a. a drop in the number of consumers of this product O b. a decrease in income taxes on consumers O C. fewer sellers in the market O d. an expectation that future prices of the product will be lower
4. Application: Demand elasticity and agriculture The following graph Illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose new gathering technology is invented, allowing growers to produce more crops using the same amount of resources. Show the affact this shock has on the market for almonds by shifting the demand curva, supply curva, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE(Dollars per loro 24 0 A QUANTITY (Thousands oftons) Demand Supply 12 Total Revenue (Thousands of Dollars) Demand Supply (?) Several growers are happy with this advancement in technology because now they can sell more crops, which they belleve will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a…
12_economics
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3) Workers at a toy factory go on strike as a result of poor conditions and low wages. Change in supply of toys: Determinant: Graph:
4. Movements along versus shifts of demand curves Consider the market demand for cereal. Complete the following table by indicating whether an event will cause a movement along the demand curve for cereal or a shift of the demand curve for cereal, holding all else constant. Event Movement Along Shift A change in the expectations of consumers about their future income A decrease in the number of consumers An increase in the price of cereal
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