A
The impact on the cigarette market when the remedy for lung cancer is discovered.
Concept Introduction:
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
A
Explanation of Solution
- A cure for lung cancer is found
Other things remaining the same, after the cure for lung cancer is found, the fear of getting non-curable cancer in the mind of the smokers will no longer exist. Now they will become fearless and the smoking might increase. The demand for cigarettes will increase. There will be a rightward shift in the demand curve from D1 to D2, supply remaining same at S1.
B
The impact on the cigarette market when there is a rise in the price of cigars.
Concept Introduction:
Demand curve: The demand curve is the graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. The X (vertical) axis represents the price and quantity demanded in the Y (horizontal) axis.
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
B
Explanation of Solution
The price of Cigars increases
Other things remaining the same, as the price of the cigarette will increase, the demand for the cigarette will decrease as per the demand law. But as the cigarette is all about addiction, the demand is more inelastic. So the demand will fall but at a much lower rate as compared to the price.
C
The impact on the cigarette market when the wages in the tobacco growing states increases.
C
Explanation of Solution
Wages increases substantially in the states that grow tobacco.
Other things remaining the same, as the wages for growing tobacco has increased, it implies that the cost of production of producing cigarettes has increased. Thus the price of cigarette will increase; the demand for the cigarette will decrease as per the demand law. But as the cigarette is all about addiction, the demand is more inelastic. So the demand will fall but at a much lower rate as compared to the price.
Introduction:
Demand curve: The demand curve is the graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. The X (vertical) axis represents the price and quantity demanded in the Y (horizontal) axis.
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
D
The impact on the cigarette market with the discovery of a fertilizer that increases the yield per acre of tobacco.
D
Explanation of Solution
A fertilizer that increases the yield per acre of tobacco is discovered
Other things remaining the same, as the fertilizer that increases the yield per acre of tobacco is discovered, it implies that the supply of tobacco will be more, and thus the supply of cigarette will increase. There will be a rightward shift in the supply curve from S1 to S2, supply remaining same at D1.
Introduction:
Demand curve: The demand curve is the graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. The X (vertical) axis represents the price and quantity demanded in the Y (horizontal) axis.
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
E
The impact on the cigarette market with an increase in the prices of lighters, matches and lighter fluid.
E
Explanation of Solution
There is a sharp increase in the price of matches, lighters and lighter fluid
Other things remaining the same, as there is a sharp increase in the price of matches, lighters and lighter fluid, it implies that the demand of cigarette will be less, as the complementary goods price has increased There will be a leftward shift in the demand curve from D1 to D2, supply remaining same at S1.
Introduction:
Demand curve: The demand curve is the graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. The X (vertical) axis represents the price and quantity demanded in the Y (horizontal) axis.
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
F
The impact on the cigarette market when the laws restricting smoking in public places and restaurants have been passed in many states.
F
Explanation of Solution
More states pass laws restricting the smoking in restaurants and public places.
Other things remaining the same, as more states pass laws restricting the smoking in restaurants and public places, implies restriction in smoking. It will lead to decreases in the demand of cigarette. There will be a leftward shift in the demand curve from D1 to D2, supply remaining same at S1.
Introduction:
Demand curve: The demand curve is the graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. The X (vertical) axis represents the price and quantity demanded in the Y (horizontal) axis.
Supply curve: The supply curve is the graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period of time. The X (vertical) axis represents the price and quantity supplied in the Y (horizontal) axis.
Want to see more full solutions like this?
Chapter 4 Solutions
MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
- HW Ch5 Calculate the daily total revenue when the market price is $180, $160, $140, $120, $100, $80, $60, and $40 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph. 2 @ 3840 3520 3200+ 2880 2560+ 2240 TOTAL REVENUE (Dollars) 1920 1600 1280 960 + 640+ 0 0 8 16 24 32 40 48 56 64 72 80 QUANTITY (Bippitybops per day) Total Revenue ? According to the midpoints formula, the price elasticity of demand between points A and B on the initial graph is approximately . Suppose the price of bippitybops is currently $60 per bippitybop, shown as point A on the initial graph. Because the price elasticity of demand between points A and B is , a $20-per-bippitybop decrease in price will lead to MacBook Air in total revenue per day. F2 80 F3 #3 $ 4 5 6 F6 < F7 * 8 & 27 DII 8 F8 F9 F10 61 0 W E R T Y U 0 P S D LL F G H J K Larrow_forwardNot use ai pleasearrow_forwardChina is a leader in international trade, has one of the highest GDPs, and currently holds the largest foreign exchange reserve in the world. Is it fair for China to fix its currency by undervaluing it on the market? How does keeping its currency undervalued give it a favorable position in international trade? What about from the viewpoints of international companies and consumers?arrow_forward
- Explain the requirements of the states that have enacted legislation to protect taxpayers from predatory tax return preparers and tax refund advances.arrow_forwardResponsd to Luis Rodriguez 1800 tons of pomegranates a year is a lot of sweetness! So, you can get 71 Afghanis for $1? How cool. Does that mean you can buy a lot of stuff in Afghanistan for only $1? How do you know that your purchasing power in Afghanistan is stronger than in the United States? Yes, with an exchange rate of 71 Afghan Afghani for 1 US dollar, you can buy many things in Afghanistan for just $1. However, purchasing power isn't solely determined by the exchange rate. It also depends on the cost of goods and services in each country. For example, if a meal in Afghanistan costs 200 Afghanis, you would need about $2.82 to buy that meal in US dollars (since 200 Afghanis divided by 71 Afghanis per dollar equals approximately $2.82). So, while the exchange rate allows you to get more Afghanis for your dollars, you also need to consider how much things cost in Afghanistan. Now that the world seems to like Afghani stuff and is buying more of it, does that mean your…arrow_forwardThe idea that a country can experience gains from trade means that it can A) consume at a point outside its production possibilities frontier. B) increase its exports. C) increase the efficiency of its production. D) experience a bowed-out production possibilities frontier.arrow_forward
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
