MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 24QE
(a)
To determine
The impact of an increase in the
(b)
To determine
The impact of an increase in the supply of labour on the quantity of labour demanded.
(c)
To determine
The impact of an increase in aggregate saving on aggregate expenditures.
(d)
To determine
The impact of a new method of producing CDs on the price of CDs.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The monthly market for U.S. steel production (in millions of tons per month) is described in the table below. An increase in the price of
iron ore, a critical input in the production of steel, shifts the supply curve to the left, decreasing supply by 200,000 tons at each price.
(Hint 200,000 tons = 0.2 million tons.)
Instructions: Round your answers to one decimal place.
a. Fill in the new supply schedule in the table using the "New Quantity of Steel Supplied" column.
Market for U.S. Steel
Price (dollars per Initial Quantity of Steel Demanded
ton)
(millions of tans)
$650
1.2
6480
630
620
618
608
598
580
570
568
P=$
per ton
P=$
1.3
1.4
1.5
per ton
1.6
1.7
1.8
1.9
b. What are the initial equilibrium price and quantity in the steel market?
2
2.1
million tons of steel
s. What are the new equilibrium price and quantity in the market?
Initial Quantity of Steel Supplied
(millions of tons)
2.2
million tons of steel
2.1
2
1.9
1.8
1.7
1.6
1.5
1.4
1.3
New Quantity of Steel Supplied
(millions of…
Problem 1. Indicate how the stated changes affect the market cquilibrium. Draw the supply and demand
diagram to illustrate the changes. In each case, write a one-sentence explanation.
P
P
P
3) The market for new cars: consumers' income taxes decrease.
b) The market for plane tickets: a study reveals the quality of cheap bus services has decreased.
c) The coffee market: a drought in Sri Lanka severely decreases the tea crop.
d) The US market for lobsters: China puts a ban on the imports of seafood from the US.
Consider the following scenarios. Think about how each scenario would affect the price of khaki pants.
A new technology reduces the time it takes to make a pair of khaki pants.
The price of the cloth used to make khaki pants falls.
The wage rate paid to garment workers increases.
The price of jeans increases.
People's incomes increase.
Assignment:
Address the following statements related to the scenario above.
Does each event change demand, supply, both, or neither? Explain your choice.
Does the event increase or decrease demand and/or supply? Explain your answer.
How does this change in demand and/or supply affect the equilibrium prices and quantity within the market?
Part 2
Compare the new demand curve or supply curve by drawing it on a graph
Find the new equilibrium and compare it with the original one in terms of equilibrium price and quantity and explain your findings
Chapter 4 Solutions
MICROECONOMICS
Ch. 4.1 - Prob. 1QCh. 4.1 - Prob. 2QCh. 4.1 - Prob. 3QCh. 4.1 - Prob. 4QCh. 4.1 - Prob. 5QCh. 4.1 - Prob. 6QCh. 4.1 - Prob. 7QCh. 4.1 - Prob. 8QCh. 4.1 - Prob. 9QCh. 4.1 - Prob. 10Q
Ch. 4 - Prob. 1QECh. 4 - Prob. 2QECh. 4 - Prob. 3QECh. 4 - Prob. 4QECh. 4 - Prob. 5QECh. 4 - Prob. 6QECh. 4 - Prob. 7QECh. 4 - Prob. 8QECh. 4 - Prob. 9QECh. 4 - Prob. 10QECh. 4 - Prob. 11QECh. 4 - Prob. 12QECh. 4 - Prob. 13QECh. 4 - Prob. 14QECh. 4 - Prob. 15QECh. 4 - Prob. 16QECh. 4 - Prob. 17QECh. 4 - Prob. 18QECh. 4 - Prob. 19QECh. 4 - Prob. 20QECh. 4 - Prob. 21QECh. 4 - Prob. 22QECh. 4 - Prob. 23QECh. 4 - Prob. 24QECh. 4 - Prob. 1QAPCh. 4 - Prob. 2QAPCh. 4 - Prob. 3QAPCh. 4 - Prob. 4QAPCh. 4 - Prob. 5QAPCh. 4 - Prob. 6QAPCh. 4 - Prob. 1IPCh. 4 - Prob. 2IPCh. 4 - Prob. 3IPCh. 4 - Prob. 4IPCh. 4 - Prob. 5IP
Knowledge Booster
Similar questions
- In each of the following cases, determine how supply or demand shifts and how the equilibrium changes. Select the correct answer in each blank space (_______) a. Smartphones: Microchips used in smartphones become less costly to produce. As a result, the __________________( *Supply of and demand for, *Supply of, or *Demand for) smartphones increase(s), causing the equilibrium price to (*Rise, *Fall, or *Rise, fall or remain unchanged) and the equilibrium quantity to (*Rise, fall or remain unchanged, *Rise, *Fall) b. ALS medical research funds: The ALS ice bucket challenge goes viral, leading to greater awareness of the benefits of and need for ALS research. As a result, the _____________ ( *Supply of and demand for, *Supply of, or *Demand for) ALS research increase(s), causing the equilibrium price (or opportunity cost) of such research to __________ (*Rise, fall or remain unchanged, *Rise, *Fall) and the equilibrium quantity to __________ (*Rise, fall or remain…arrow_forwardWhich of the following is true about quantity supplied? * The quantity supplied of a good is equal to the difference between the quantity available and the quantity desired by all consumers and producers. The quantity supplied of a good is the same thing as the quantity demanded at each price. The quantity supplied of a good is the amount that the producers are planning to sell at a particular price during a given time period. The quantity supplied of a good is the amount the firm would sell if it faced no resource constraints.arrow_forwardDemand for cookies is of the following form: P=20-4QD, where QD is millions of cookies demanded per year and P is price in US dollars. Supply of cookies of the following form: P=6+Qs, where QS is millions of cookies supplied per year and P is price in US dollars. a. What is the equilibrium quantity of cookies traded? Solve the equation, showing your work. b. Graph the supply and demand curves, marking their intersection. Be sure to label intercepts, equilibrium, etc. c. The government imposes a tax of $2 per cookie on producers of cookies. What is the new equilibrium quantity of cookies traded? Solve the equation, showing your work. d. In a graph, show how the supply curve has shifted. What price do consumers now pay? After paying the tax, how much to producers receive.arrow_forward
- Factors affecting demand and supply are the various factors that influence the quantity of a good or service that buyers (consumers) are willing to purchase and the quantity that sellers (producers) are willing to produce and sell, respectively. Understanding the factors is important for businesses, policymakers, and consumers to make informed decisions about pricing, production, and consumption. The prediction is that global consumption of crude oil will exceed production by 20 million barrels this year, which means there will be a shortage of supply. This could lead to further price increases if demand continues to grow, which would result in higher costs for consumers and businesses. However, this imbalance is likely to be corrected over time as higher prices incentivize more production, while lower demand could lead to a reduction in consumption. Additionally, new sources of supply could come up or existing sources could increase their output in response to higher prices. In the…arrow_forwardHow would [1] a decrease in the price of flour and [2] an improvement in technology of pizza making would affect the market price and quantity of pizza, other things remaining constant? The price of pizza would drop and the equilibrium quantity would rise. The price of pizza would drop but the impact on the equilibrium quantity is uncertain. The equilibrium quantity of pizza would rise but the impact on price is uncertain. Both the price as well as the equilibrium quantity of pizza would rise.arrow_forwardAre predictions using the supply-and-demand model likely to be reliable in each of the following markets? Why or why not?a. Apples.b. Convenience stores.c. Electronic games (a market with three major firms).d. Used carsarrow_forward
- Evaluate the effect of changes in supply and demand on theequilibrium price and quantity.arrow_forwardMatch the Determinants with the appropriate change in the market for chocolate.arrow_forwardConsider the market for cars. Which determinant of demand is affected by each of the following events? a. Environmentalists launch a successful One Family, One Car campaign: (Click to select) b. A baby boom occurred 16 years ago: (Click to select) c. Layoffs increase as the economy sheds millions of jobs: (Click to select) d. An oil shortage causes the price of gasoline to soar: (Click to select) Number of buyers Prices of related goods Incomes Consumer preferences Expectations e. The government offers tax rebates in return for the purchase of commuter rail tickets: (Click to select) ✓ f. The government announces a massive plan to bail out the auto industry and subsidize production costs (Click to select)arrow_forward
- Answer the given question with a proper explanation and step-by-step solution. Which of the following statements is/are correct? i. An increase in the price of kettles will result in an increase in the supply of kettles. ii. An increase in the price of any of the factors of production will result in a leftward shift of the supply curve. iii. An increase in the wages of workers at Mr Juicy drink factory in Durban will result in a movement along the supply curve of Mr Juicy drinks, ceteris paribus. iv. In their supply decisions, producers take account of the prices of all the alternative products they can produce. a) Only i, ii , iii and iv. b) Only ii and iv. c) Only ii and iii. d) Only i, ii and iv.arrow_forwardOnce again, consider the market for lobster, which is widely considered to be a luxury. Which of the following graphs describes how an economic recession will affect the price and quantity (i.e., equilibrium price and equilibrium quantity) of lobster? The price will increase and the quantity will decrease. The price will decrease and the quantity will increase. Both the price and the quantity will decrease. Both the price and the quantity will increase.arrow_forwardThe law of demand is the first and primary law of economics. Do you agree? Explain the law of demand with the help of a clearly labelled diagram. [Answer in 150 – 200 words] [Draw in paper; take photo and paste/Use MS Word/add screenshot] b) Though, the law of demand is the primary law of economics, it is subject to certain limitations in the form of exceptions. Discuss any five such exceptions to law of demand with valid examples.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
