Microeconomics (6th Edition)
6th Edition
ISBN: 9780134106243
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 3.4.9PA
Subpart (a):
To determine
The effect of the market of banana and apple in US.
Subpart (b):
To determine
The effect of the market of banana and apple in US.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
1. Years ago, an apple producer argued that the United States should enact a tariff, or a tax, on imports of bananas. His reasoning was that “the enormous imports of cheap bananas into the United States tend to curtail the domes-tic consumption of fresh fruits produced in the United States.”.
a. Was the apple producer assuming that apples and bananas are substitutes or complements? Briefly explain.
b. If a tariff on bananas acts as an increase in the cost of supplying bananas in the United States, use two demand and supply graphs to show the effects of the apple producer’s proposal. One graph should show the effect on the banana market in the United States, and the other graph should show the effect on the apple market in the United States. Be sure to label the change in equilibrium price and quantity in each market and any shifts in the demand and supply curves.
Years ago, an apple producer argued that the United States should enact a tariff, or a tax, on imports of bananas. His reasoning was that “the enormous imports of cheap bananas into the United States tend to curtail the domes-tic consumption of fresh fruits produced in the United States.”.
Was the apple producer assuming that apples and bananas are substitutes or complements? Briefly explain.
If a tariff on bananas acts as an increase in the cost of supplying bananas in the United States, use two demand and supply graphs to show the effects of the apple producer’s proposal. One graph should show the effect on the banana market in the United States, and the other graph should show the effect on the apple market in the United States. Be sure to label the change in equilibrium price and quantity in each market and any shifts in the demand and supply curves.
Due to the government's program for developing alternative fuels, the demand for ethanol has increased dramatically. Ethanol is made from corn. Corn is also used as a feed for hogs. Simultaneously, many more cases of mad cow disease have been discovered in the United States. Assume that pork and beef are substitutes in consumption, but not in production. As a result of these two changes, what will happen to the price and output of pork? Briefly explain.
Chapter 3 Solutions
Microeconomics (6th Edition)
Ch. 3 - Prob. 1TCCh. 3 - Prob. 2TCCh. 3 - Prob. 3.1.1RQCh. 3 - Prob. 3.1.2RQCh. 3 - Prob. 3.1.3RQCh. 3 - Prob. 3.1.4RQCh. 3 - Prob. 3.1.5RQCh. 3 - Prob. 3.1.6PACh. 3 - Prob. 3.1.7PACh. 3 - Prob. 3.1.8PA
Ch. 3 - Prob. 3.1.9PACh. 3 - Prob. 3.1.10PACh. 3 - Prob. 3.1.11PACh. 3 - Prob. 3.1.12PACh. 3 - Prob. 3.1.13PACh. 3 - Prob. 3.1.14PACh. 3 - Prob. 3.1.15PACh. 3 - Prob. 3.1.16PACh. 3 - Prob. 3.1.17PACh. 3 - Prob. 3.2.1RQCh. 3 - Prob. 3.2.2RQCh. 3 - Prob. 3.2.3RQCh. 3 - Prob. 3.2.4PACh. 3 - Prob. 3.2.5PACh. 3 - Prob. 3.2.6PACh. 3 - Prob. 3.2.7PACh. 3 - Prob. 3.2.8PACh. 3 - Prob. 3.2.9PACh. 3 - Prob. 3.3.1RQCh. 3 - Prob. 3.3.2RQCh. 3 - Prob. 3.3.3RQCh. 3 - Prob. 3.3.4PACh. 3 - Prob. 3.3.5PACh. 3 - Prob. 3.3.6PACh. 3 - Prob. 3.3.7PACh. 3 - Prob. 3.3.8PACh. 3 - Prob. 3.3.9PACh. 3 - Prob. 3.4.1RQCh. 3 - Prob. 3.4.2RQCh. 3 - Prob. 3.4.3PACh. 3 - Prob. 3.4.4PACh. 3 - Prob. 3.4.5PACh. 3 - Prob. 3.4.6PACh. 3 - Prob. 3.4.7PACh. 3 - Prob. 3.4.8PACh. 3 - Prob. 3.4.9PACh. 3 - Prob. 3.4.10PACh. 3 - Prob. 3.4.11PACh. 3 - Prob. 3.4.12PACh. 3 - Prob. 3.4.13PACh. 3 - Prob. 3.4.14PACh. 3 - Prob. 3.4.15PACh. 3 - Prob. 3.4.16PACh. 3 - Prob. 3.4.17PACh. 3 - Prob. 3.4.18PA
Knowledge Booster
Similar questions
- The following graph shows the market for cereal in San Diego, where there are over 1,000 stores that sell cereal at any given moment. Suppose a new scientific study shows that San Diego is the most polluted city in the world. Due to health concerns, a significant number of families move out of the city. *graph Now suppose Congress passes a new tax that decreases the income of San Diego residents. If cereal is a normal good, this will cause the demand for cereal to increase or decrease?arrow_forwardBriefly describe the concept of demand and supply in economics.arrow_forwardA student was asked to draw a demand and supply graph to illustrate the effect on the market for premium bottled water of a fall in the price of electrolytes used in some brands of premium bottled water, holding everything else constant. She drew the graph to the right and explained it as follows: "Electrolytes are an input to some brands of premium bottled water, so a fall in the price of electrolytes will cause the supply curve for premium bottled water to shift to the right (from S, to S₂). Because this shift in the supply curve results in a lower price (P₂), consumers will want to buy more premium bottled water and the demand curve will shift to the right (from D, to D₂) We know that more premium bottled water will be sold, but we can't be sure whether the price of premium bottled water will rise or fall. That depends on whether the supply curve or the demand curve has shifted farther to the right. I assume that the effect on supply is greater than the effect on demand, so I show…arrow_forward
- According to a news article on bloomberg.com, the demand for coffee is increasing as "millennials' seemingly unquenchable thirst for coffee is helping to push global demand to a record." At the same time, coffee crops in Brazil and Asia have been hampered by dry weather and droughts. The article notes that "consumption is rising as supplies are getting tighter." Source: Marvin G. Perez, "Coffee-Loving Millennials Push Demand to a Record," bloomberg.com, October 30, 2016. Use a demand and supply graph of the coffee market to illustrate how the equilibrium quantity of coffee can increase as a result of these events. Be sure that all curves on your graphs are properly labeled, that you show any shifts in those curves, and that you indicate the initial and final equilibrium points. 1.) Using the line drawing tool, graph the effect of the growth in millennial demand for coffee by drawing a new demand curve. Label your curve 'D₂.' 2.) Using the line drawing tool, graph the effect of dry…arrow_forwardUse the following graph of the demand for American cheese to answer the question below: 55 Price (per pound) 3 2 0 D₂ •D, 2460 10 12 14 16 18 20 Quantity Demanded (thousands of pounds per week) Refer to the three demand curves for American cheese and assume that American cheese is an inferior good. Which of the following would shift the demand from D1 to D2: A decrease in consumer incomes An increase in consumer incomes A decrease in the price of American cheese An increase in the price of American cheesearrow_forwardAccording to an article in the Wall Street Journal, in early 2017, President Donald Trump was considering whether to reverse a requirement by the Environmental Protection Agency that oil refiners increase the amount of ethanol they blend with gasoline. If the requirement were to remain, the result would be an increase in demand for ethanol, which is made from corn. Many U.S. farmers can use the same acreage to grow either corn or soybeans. Use TWO SEPARATE demand and supply graphs to analyze the effect on the equilibrium price and equilibrium quantity of CORN and Soybeans resulting from an increase in demand for ethanol Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Firewood prices in places from northern California to Boston and New Jersey have remained steady even though the supply of firewood has been diminished by environmental restrictions on cutting trees. The Wall Street Journal reports that sales of gas fireplaces are outpacing sales of wood-burning heaths and that “people are burning less and less wood.” Use supply and demand analysis to show why firewood prices are not rising while the supply of firewood burned is declining. You must include a graph of the demand and supply curves of firewood and give an explanationarrow_forwardI recently stumbled upon the following quote in a newspaper: "Increased production (i.e. an increase in supply) leads to a lower price; which in turn, increases demand." Do you agree with such reasoning? Briefly explain.arrow_forward7arrow_forward
- The following graph shows the market for microwavable ramen noodles. Pramen O Price increase, quantity decreases O Price stays the same, quantity decreases Price increases, quantity changes ambiguously Supply Price increases, quantity stays the same Demand Initially, the market is in equilibrium. Then, the price of microwaves decreases. At the same time, the number of firms making ramen decreases. Which of the following is true about the new price and quantity after both shifts? Qramenarrow_forwardEC 252 Midterm 2 SA Practice 2. Use the following graph to answer questions A-C: Supply and Demand for Lumber 55 50 45 40 35 30 25 20 15 10 5 35 45 40 50 40 45 55 45 50 60 70 50 55 65 60 70 75 55 65 75 80 70 80 Supply 75 85 Demand 2 Demand 1 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 A) Suppose Demand 1 is the market demand curve. Further, suppose Demand 2 represents the market demand curve when there is a tax imposed on consumers. What is the per unit amount of the tax? What is the share of the burden of the tax? B) What is the total revenue collected by the tax? Will there be a dead weight loss as a result of the tax? If so, how large is it?arrow_forwardAccording to a 2018 article in the Wall Street Journal, proposed tariffs on imported steel could cause the price to consumers of new cars to increase by as much as $300. Use a graph to illustrate the impact of this on the current demand curve for new cars in the United States.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning