Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 1.6P
Subpart (a):
To determine
To illustrate the given situation with
Subpart (b):
To determine
To illustrate the given situation with supply and demand curves.
Subpart (c):
To determine
To illustrate the given situation with supply and demand curves.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Illustrate the following with supply or demand curves:
a. In Joseph Heller's iconic novel, Catch 22, one of the characters was paid by the government to not grow
alfalfa. According to the story's narrator, "The more alfalfa he did not grow, the more money the government
gave him, and he spent every penny he didn't earn on new land to increase the amount of alfalfa he did not
produce."
b. In 2018, Dunkin' Donuts removed six sandwich options from its menu in an effort to streamline operations,
and this had a significant impact on the number of donuts it sold to customers.
c. From 2014 to 2016, median income in the United States rose by 8.5 percent, shifting the demand curve for
gasoline. During that same time period, crude oil prices fell 55 percent, shifting the supply of gasoline. At the
new equilibrium, the price of gasoline is less than it was before. (Crude oil is used to produce gasoline.)
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…
As oil prices rose during 2006, the demand for alternative fuels increase. Ethanol, onealternative for fuel is made from corn. According to an article in the Wall Street Journal, theprice of tortillas, which are made from corn, also rose during 2006. “The price spike [intortillas] is part of a ripple effect from the ethanol boom”a. Draw a demand and supply graph for the corn market and use it to show the effect onthis market of an increase in the demand for ethanol. Be sure to indicate theequilibrium price and quantity before and after the increase in the demand for ethanol.b. Draw a demand and supply graph for the tortilla market and use it to show the effect onthis market of an increase in the price of corn. Once again, be sure to indicate theequilibrium price and quantity before and after the increase in the demand for ethanol.c. By 2015, the price of oil had fallen, which reduced the price of gasoline. The demandfor ethanol fell along with the price of gasoline. What impact would…
Chapter 4 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
Knowledge Booster
Similar questions
- In this question, you'll explore the effect of a plentiful crop in Vermont on the price of blueberries in the United States, as well as on the daily wages of blueberry pickers in Florida. Assume that blueberry buyers don't care whether their blueberries come from Vermont or Florida. On the following graph, show the effect the plentiful crop in Vermont has on the market for blueberries in the United States by shifting either the demand curve, the supply curve, or both. PRICE (Dollars per pint) 10 fall 9 WAGE (Dollars per worker) 8 7 2 + 1 0 + 0 Market for Blueberries in the United States Supply Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pints of blueberries) Based on the graph for the market for blueberries in the United States, the plentiful crop has caused the price of blueberries in the United States to wing graph shows the daily market for blueberry pickers in Florida. Market for Blueberry Pickers in Florida Demand rise Show the effect of the change in the…arrow_forwardWhen asked for investment advice, humorist Will Rogers joked that people should “[b]uy land. They ain’t making any more of the stuff.” Explain his advice in terms of the supply and demand modelarrow_forwardBriefly describe the concept of demand and supply in economics.arrow_forward
- Suppose the following graph shows the market supply for avocados. A severe drought destroys much of the crop of avocados. Show the impact of the severe drought by shifting the supply curve on the following graph.arrow_forwardPrices serve two important functions in a market economy.Briefly explain these two functions.arrow_forwardIn 2007, the average price of renting a ship to carry raw materials from Brazil to China nearly tripled to $180,000 a day from $65,000 in the previous year (Robert Guy Matthews, “Ship Shortage Pushes Up Prices of Raw Materials,” Wall Street Journal, October 22, 2007, A1). a. Use graphs to illustrate that this increase in the price of shipping is due to an increase in demand, particularly from the growing Chinese and Indian economies, and a fixed number of ships in the short run. In the long run, after an increase in the number of ships, shipping prices should drop. b. For some goods, ocean shipping can be more expensive than the cargo itself: Iron ore costs about $60 a ton, but it costs about $88 a ton to transport it from Brazil to Asia. Higher shipping rates are expected to increase commodity prices according to weight, with transportation fees making up a larger percentage of the cost of heavier products like iron ore and grain. The trend may force manufacturers to…arrow_forward
- The following is an excerpt from an article in the Singaporean newspaper, the Straits Times: Singaporeans with a sweet tooth could soon find themselves paying more for their favourite treats, as bakers and confectioners buckle under soaring sugar prices. Since March last year, the price of white sugar has shot up by 70 per cent, according to the New York Board of Trade. As if that didn’t make life difficult enough for bakers, butter and cheese prices have also risen, by 31 per cent and 17 per cent respectively. The increases have been caused by various factors: a steep drop in Thailand’s sugarcane production due to drought, higher sea freight charges, increasing demand from China’s consumers for dairy products and the strong Australian and New Zealand dollar. For the consumer in Singapore, what this may eventually boil down to is a more expensive bag of cookies, with prices at some bakeries expected to rise between 10 and 20 per cent. [The owner of a Singapore…arrow_forward) A newspaper article mentions that two of South Korea’s largest semiconductor manufacturers, - Samsung Electronics Company and Hynix Semiconductor - would suspend all their memory chip production for some time. The article goes on to say that another large semiconductor manufacturer was likely to follow suit. Collectively, these chip manufacturers produce about 30 percent of the world’s basic semiconductor chips. Based on this information, how is the market for computers altered? Explain in detail.arrow_forwardThe following graph shows the market for peanut butter in Vancouver, where there are more than a thousand stores that sell peanut butter at any given moment. Suppose a new scientific study shows that Vancouver is the most polluted city in the world. Due to health concerns, a significant number of families move out of the city. Show the effect of this change on the market for peanut butter by shifting one or both of the curves on the following graph, holding all else constant. Supply Demand Supply Demand QUANTITY (Jars) PRICE (Dollars per jar)arrow_forward
- In this question, you'll explore the effect of a plentiful crop in Washington State on the price of raspberries in the United States, as well as on the daily wages of raspberry pickers in Oregon. Assume that raspberry buyers don't care whether their raspberries come from Washington State or Oregon. On the following graph, show the effect the plentiful crop in Washington State has on the market for raspberries in the United States by shifting either the demand curve, the supply curve, or both. PRICE (Dollars per quart) 20 18 16 14 12 10 8 6 4 2 0 0 Market for Raspberries in the United States Supply Demand 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Millions of quarts of raspberries) Demand Supply ? Based on the graph for the market for raspberries in the United States, the plentiful crop has caused the price of raspberries in the United States toarrow_forwardThe following graph shows the market for cars in 2007. Between 2007 and 2008, the equilibrium price of cars remained constant, but the equilibrium quantity of cars decreased. From this, you can conclude that between 2007 and 2008, the supply of cars and the demand for cars Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2008. 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 car) QUANTITY (Cars) Supply Demand Demand O Supply ?arrow_forwardplease answer using a supply and demand graph to demonstartearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc