Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 28P
Identify each of the following as involving either
- Households in the labor market
- Firms in the goods market
- Firms in the financial market
- Households in the goods market
- Firms in the labor market
- Households in the financial market
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For each of the events describe below, you are required to explain:
1. The market you are evaluating (e.g., labour market, automotive market, etc).
2. Does the event act on the demand side, supply side, or both sides of the market?
3. Does the event lead to a quantity or price change? Or does the event lead to a shift in
demand, supply, or both?
Make sure to explain what sort of assumptions you are making on the elasticities of demand
and supply (when plotting your demand and supply, describe whether you are assuming an
elastic or inelastic demand/supply).
a) A reduction of supply as a consequence of a disruption in the world oil markets
b) The implementation of a minimum wage
c) The implementation of taxes to manufacturing of cars in Australia
d) The implementation of a Carbon tax in the economy. A Carbon tax is charged
according to the level of emissions of greenhouse gases in an economy.
e) The implementation of a new loan program to university students in the education
sector
For each of the events describe below, you are required to explain:1. The market you are evaluating (e.g., labour market, automotive market, etc).2. Does the event act on the demand side, supply side, or both sides of the market?3. Does the event lead to a quantity or price change? Or does the event lead to a shift indemand, supply, or both?Make sure to explain what sort of assumptions you are making on the elasticities of demandand supply (when plotting your demand and supply, describe whether you are assuming anelastic or inelastic demand/supply).a) A reduction of supply as a consequence of a disruption in the world oil marketsb) The implementation of a minimum wagec) The implementation of taxes to manufacturing of cars in Australiad) The implementation of a Carbon tax in the economy. A Carbon tax is chargedaccording to the level of emissions of greenhouse gases in an economy.e) The implementation of a new loan program to university students in the educationsector
Suppose Kate earns $625 per week working as a doctor for the Medical Clinic. She uses $8 to have breakfast at Dinah's Diner. Dinah's Diner pays
Hubert $500 per week to work as a short-order cook. Hubert uses $175 to purchase medical services from the Medical Clinic.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
Event
Factor Market
Product Market
Kate spends $8 to have breakfast.
Kate earns $625 per week working for the Medical Clinic.
Hubert earns $500 per week working for Dinah's Diner.
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that
apply.
The $175 Hubert spends to purchase medical services from the Medical Clinic
The $500 per week Hubert earns working for Dinah's Diner
The breakfast Kate receives
Kate's labor
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Chapter 4 Solutions
Principles of Economics 2e
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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- Suppose Teresa earns $875 per week working as a corporate attorney for Rowan and Martin Associates. She uses $9 to order a mojito cocktail at Little Havana. Little Havana pays Sam $350 per week to wait tables. Sam uses $200 to purchase legal service from Rowan and Martin Associates. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Sam spends $200 to purchase legal service from Rowan and Martin Associates. Teresa earns $875 per week working for Rowan and Martin Associates. Teresa spends $9 to order a mojito cocktail. Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that аpply. O Teresa's labor O The $350 per week Sam earns working for Little Havana O The mojito Teresa receives O The $200 Sam spends to purchase legal service from Rowan and Martin Associatesarrow_forwardWhich of the following statements about the market is true? In the factor market, firms are sellers. Stocks and bonds are examples of physical capital. The bookstore is an example of both physical market and product market. There is only a group of buyers in the market.arrow_forwardHousing policy analysts debate the best way to increase the number of housing units available to low-income households. One strategy-the demand-side strategy is to provide people with housing vouchers, paid for by the government, which can be used to rent housing supplied by the private market. Another-a supply-side strategy-is to have the government subsidize housing suppliers or to build public housing. Using the line drawing tool, draw a single line to show the effect of a supply-side strategy. Properly label your line. Carefully follow the instructions above and only draw the required object. Rent ($) Market for Housing Quantity So •Doarrow_forward
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