MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 10, Problem 2QR
To determine
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The prices of both soft and hard commodities are very volatile. Explain why?
Write down the factors affecting supply. Which of the following factors will cause the following products to increase or decrease?
Crude oil
Beef
Hotel rooms
Fast food outlets
Credit cards issued by financial institutions
Laptop computers
Imagine you are the owner of a natural gas company. You can either extract as much of the resource as fast as possible or delay extraction until a future time. Projections indicate that the price of natural gas is expected to fall in the future. What would you do in the present?
a. Sell as much natural gas as possible now and less in the future—reflected by a rightward shift of the current supply curve in the future. B. Sell as much natural gas as possible now and less in the future—reflected by a movement down the current supply curve.C. Sell as much natural gas as possible now and less in the future—reflected by a movement up the current supply curve.D. Sell as little natural gas as possible in the present and delay extraction until the future—reflected by a leftward shift of the current supply curve in the future.
Chapter 10 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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- How do changes in the interest and unemployment rates impact the supply curve?arrow_forwardIn the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will(FALL, RISE, OR REMAIN THE SAME) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (REDUCING OR INCREASING) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (RISE ABOVE OR FALL BELOW)…arrow_forwardEnumerate the factors that affect a static supply schedule and explain themarrow_forward
- Please help me with the grapharrow_forwardPrice A B D $1 C D1 S2 D2 Quantity per period Refer to the above graph to answer this question. How could you describe the movement from point D to point A? Select one: A. A decrease in supply which leads to a decrease in the equilibrium price a decrease in demand. B. A decrease in demand which leads to an increase in the equilibrium price and a decrease in supply. C. A decrease in demand which leads to an increase in the equilibrium price and a decrease in the quantity supplied. O D. A decrease in supply which leads to an increase in the equilibrium price and a decrease in demand. O E. A decrease in supply which leads to an increase in the equilibrium price and a decrease in quantity demanded.arrow_forwardExplain why demand policies can only reduce unemployment below the natural rate in the short-run.arrow_forward
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