Consider a hypothetical market for milk. The market is perfectly competitive. All else equal, what happens to the market equilibrium price and quantity of milk if two events occur?: the price of almond milk (a substitute good) rises, and at the same time input costs decline. O price rises and quantity is uncertain O price falls and quantity is uncertain price is uncertain and quantity rises price is uncertain and quantity falls

Consider a hypothetical market for milk. The market is perfectly competitive. All else equal, what happens to the market equilibrium price and quantity of milk if two events occur?: the price of almond milk (a substitute good) rises, and at the same time input costs decline. O price rises and quantity is uncertain O price falls and quantity is uncertain price is uncertain and quantity rises price is uncertain and quantity falls

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The market supply curve is: O a graph that plots the total quantity of a good or service supplied by the entire market at each price. a graph that plots the quantity of a good or service supplied at each price by one seller. a graph that plots the total quantity demanded of a good or service by the entire market at each price. the total cost of production of a good or service for the entire market.
An add in the newspaper claims that the price of milk will increase next week. At the same time, a new and improved pasteurization process makes milk production more efficient. Given these two effects, what can we say about the equilibrium price and quantity of milk? O Equilibrium price will decrease; the effect on quantity is ambiguous. O Equilibrium quantity will decrease, equilibrium price will increase. O Equilibrium price will increase; the effect on quantity is ambiguous. O Equilibrium quantity will increase; the effect on price is ambiguous.
Which of the following would cause the price of beef to rise and the quantity to rise? O a. An increase in the price of chicken O b. New regulations regarding the raising of animals that are costly to implement O c. Increased social concern about the negative consequences of beef consumption O d. A reduction in the price of hay and silage (these are both things fed to cows)
The figure belov WS supply i demand curves for bread. 45 4.0 Supply (maginal cost 35 30 20 00 O 1 00 2,000 3,000 4000 5,000 6,000 7,000 8000 9,000 10,000 Quantity of loaves,Q You will not be given credit unless you provide a detailed explanation for the following questions! a) What are the equilibrium price and the equilibrium quantity in the bread market? How can you tell? Is there excess supply or excess demand in the bread market when the price of bread is 2.5 euros? Why? Explain how price, quantity demanded and quantity supplied will adjust to reach equilibrium when the price is b) 2.5 euros. Initially, the bread market is in equilibrium. Suppose that there is technological improvement in the production process of bread. Explain how supply and demand curves, equilibrium price and equilibrium quantity c) change as result.
The price of sugar (a substitute for corn syrup) decreased. At the same time, the price of corn starch (one of the main ingredients of corn syrup) increased. These two effects together will lead to the following change in the price and quantity of corn syrup: O A decrease in quantity and an ambiguous effect on price O A decrease in price and an increase in quantity O An increase in both price and quantity O An increase in price and an ambiguous effect on quantity O An increase in quantity and an ambiguous effect on price
Which of the following pair of events leads to a DEFINITE decrease in the price of baby food? * An increase in the birth rate and a decrease in wages for workers in the baby food industry. O An increase in the birth rate and an increase in regulations for baby food production. O An increase in the birth rate and a decrease in regulations for baby food production. A decrease in the birth rate and a decrease in wages for workers in the baby food industry. A decrease in the birth rate and an increase in wages for workers in the baby food industry.
Suppose an economic boom causes incomes to increase and, at the same time, drives up wages for the sales representatives who work for cell phone companies. Assume that smartphones are a normal good. This will cause the: O price of cell phones and the equilibrium quantity to rise. O price of cell phones to rise, but the change in the equilibrium quantity is unclear and depends on whether the shift in demand is larger or smaller than the shift in supply. O price of cell phones and the equilibrium quantity to fall. O quantity of cell phones to rise, but the change in the equilibrium price is unclear and depends on whether the shift in demand is larger or smaller than the shift in supply.
The point at which the supply curve and the demand curve intersect is the market price, or the equilibrium price. O True False
Consider the following statement: "The market supply for natural gas is the sum of all prices that natural gas producers are willing and able to sell at for every quantity." What is the flaw in this statement? O It should state that market supply is the sum of the quantities of natural gas that producers are willing and able to sell at every price. O It should state that market supply is the quantity of natural gas that producers are willing and able to sell at one specific price. There is no flaw in this statement. It should state that market supply is the price of natural gas that one firm is willing and able to provide a specified quantity of its product at.
Which of the following will cause the demand curve to shift? O A. newer technology and improved productivity a change in consumer income B. C. a change in the cost of raw materials O D. more firms in the market
Several advertisements announce that the price of hand sanitizer will be decreasing next month. At the same time, the price of rubbing alcohol, an ingredient used to make hand sanitizer has decreased. Given these two effects, what can we say about the current equilibrium price and quantity of hand sanitizer? → a. Equilibrium price will increase, equilibrium quantity will decrease. O b. Equilibrium quantity will decrease; the effect on price is ambiguous. O c. Equilibrium quantity will increase; the effect on price is ambiguous. O d. Equilibrium price will decrease; the effect on quantity is ambiguous.
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