the need for oil, an input into gasoline, increased one year because of a severe winter.Many homes in the northeast heat their homes with oil.2. Why would supply and demand theory suggest that price controls (to deal with thesituation described in the previous question) have negative consequences?They are politically unpopular.They cause shortages of gasoline.They shift the demand for gasoline to the right because of a change in tastes.Both b) and c) are correct.а.b.С.d.

Answered: the need for oil, an input into…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. When supply shifts left and demand shifts right, Group of answer choices the equilibrium price always falls. the equilibrium quantity always rises. the equilibrium price is indetenminate. the equilibrium price always rises. the equilibrium quantity always falls. A new car is typically considered to be a nomal good. What would happen to the equilibrium price and quantity of new cars if there is a recession where many people lose their jobs? 2. Group of answer choices There would be no change to the equilibrium price or quantity. The equilibrium price and quantity would both rise as demand shifts to the right. The equilibrium price would rise, and the equilibrium price would fall as demand shifts to the left The equilibrium price would fall, and the equilibrium quantity would rise as denmand shifts to the right. The equilibrium price and quantity would both fall as demand shifts to the left 3. Producer surplus is the difference between Group of answer choices the price paid for a good…
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Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes for consumption. 1. Discuss the effect on the markets for each of the three products if the government implements a price restriction (price floor) in the sugarcane market with the aim of protecting the farmers. 2. How will this impact the revenues for sugar growers, rum producers, and whiskey producers?
1. Assume a market for a normal good is currently in equilibrium. If the government increases the taxes that firms must pay, then: Demand will (decrease / increase / not change): Blank 1 Supply will (decrease / increase / not change): Blank 2 Equilibrium price will (decrease / increase / not change): Blank 3 Equilibrium quantity will (decrease / increase / not change): Blank 4 2. Assume a market for a normal good is currently in equilibrium. If consumers's incomes decrease, then: Demand will (decrease / increase / not change): Blank 1 Supply will (decrease / increase / not change): Blank 2 Equilibrium price will (decrease / increase / not change): Blank 3 Equilibrium quantity will (decrease / increase / not change): Blank 4
4a.) Let QDx 30 - 3*Px and Qsx=-10 + 2*Px. Given that, calculate equilibrium price and quantity. %3D b.) Calculate QDx and Qsx for a price one dollar greater than equilibrium. Is this a shortage or surplus? Of how many units?
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(3) A recent study found that the demand-and-supply schedules for Frisbees are as follows: a. What are the equilibrium price and quantity of Frisbees? (2)b. Frisbee manufacturers persuade the government that Frisbee production improvesscientists’ understanding of aerodynamics and thus is important for nationalsecurity. A concerned Diet members votes to impose a price floor $2 above theequilibrium price. What is the new market price? How many Frisbees are sold? (4)c. University students march on Tokyo and demand a reduction in the price ofFrisbees. An even more concerned Diet members votes to repeal the price floorand impose a price ceiling $1 below the former price floor. What is the newmarket price? How many Frisbees are sold? Price per Frisbee Quantity Demanded Quantity Supplied $11 1 million Frisbees 15 million Frisbees 10 2 12 9 4 9 8 6 6 7 8 3 6 10 1
1. Which of the following will result in an uncertainty regarding any change that might occur in the equilibrium quantity but a definite increase in the equilibrium price? a) An increase in demand and a decrease in supply b) A decrease in demand and a decrease in supply c) A decrease in demand and an increase in supply d) An increase in demand and an increase in supply 2. In a production possibility frontier (PPF) graph it is observed that points 1,2,3, and 4 lie on the PPF, Point 5 is outside the PPF, and point 6 is inside the PPF. Which of the following statements is correct? a) Point 6 can be produced only if there is an increase in resource availability and/or an improvement in technology. b) Points 1-4 and 6 can be produced with the currently available resources and technology, but resources are used efficiently only at points 1-4. c) Point 5 can be produced with the currently available resources and technology, but the resource use is inefficient. d) Point 6 can be produced with…
1. Suppose that a small, tropical country produces mangoes for domestic consumption and possibly for export. The national demand and supply curves for mangoes in this country are given by the following: P = 50 - M P = 25 + M (national demand) (national supply) where P denotes the relative price of mangoes and M denotes the quantity of mangoes (in metric tons). (a) Illustrate these relationships geometrically. What is the autarky price and quantity (b) exchanged? (c) Suppose that the world price of mangoes is 45. Will this small country export mangoes? If so, how many tons?
$ $3.50 $3.25 $ $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 Demand Supply 20 22 24 26 28 30 32 34 36 Quantity (gallons per day) Instructions: In parts b and c, round your responses to two decimal places. In part d, enter your response as a whole number. b. What is the equilibrium price? 2.50 per gallon Demand Supply c. If quantity supplied at every price is reduced by 12 gallons, what is the new equilibrium price? per gallon d. If the government freezes the price of gasoline at its initial equilibrium price found in part a, how much of a surplus or shortage will exist when supply is reduced as described in part c? There will be a (Click to select) of gallons.
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Q. How does a price ceiling undermine the rationing function of market- determined prices? How could rationing coupons ensure that consumers with the highest values get the limited amount of a good supplied when government price ceilings create shortages? Please provide a throrough explanation.

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