Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 4, Problem 2WNG
To determine
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In the preceding diagram, what areas represent consumers'surplus at the equilibrium price of PE ? At PC ? (Keep in mindthat the equilibrium quantity is not produced and sold at PC.)
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- Suppose the technology to manufacture computers improves but due to some recession in the economy, the income of the consumers falls. Assuming computers to be a normal good, what will be the equilibrium quantity and price for computers in this case?"arrow_forwardUse the figure below to answer the following question. $5 Price (per pound) n N 0 2 4 6 8 10 12 14 16 18 20 Quantity Supplied (thousands of bushels per week) The diagram shows three supply curves for apples. Which of the following would cause the supply of apples to shift from S₁ to $3?arrow_forwardPRICE (Dollars per cup) Suppose that Brian and Crystal are the only suppliers of iced lattes in some hypothetical market. Their monthly supply schedules are given by the following table: Price (Dollars per cup) Brian's Quantity Supplied Crystal's Quantity Supplied (Cups) (Cups) 1 0 3 2 4 6 3 6 8 4 7 10 5 8 11 On the following graph, plot Brian's supply of iced lattes using the green points (triangle symbol). Next, plot Crystal's supply of iced lattes using the purple points (diamond symbol). Finally, plot the market supply of iced lattes using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. 5 0 0 4 8 12 16 20 24 QUANTITY (Cups) Brian's Supply Crystal's Supply --- Market Supplyarrow_forward
- Must consumers' surplus equal producers' surplus at equilibrium price? please explainarrow_forwardSuppose that the market demand for Turkey is given by: Q_(T)=2-8P_(T)+2P_(C)+0.0015I Where Q_(T) is annual quantity demanded of turkey in million pounds, P_(T) is the price of turkey per pound, P_(C) is price of chicken per pound, and I is the average household income in dollars per year. a. Find the annual quantity demanded of turkey if the price turkey is $2.00 per pound, price of chicken is $1.50 per pound and the annual household income is $30,000.arrow_forwardConsider the market for hazelnuts. Use the supply and demand model to explain the effect of the following scenarios on the equilibrium price (P*) and the equilibrium quantity (Q*) of hazelnuts. In each of the following scenarios, does the supply curve shift? Does the demand curve shift? If there is a shift of the supply and/ or the demand curve, in what direction? Show graphically. Does the equilibrium price of hazelnuts increase or decrease? Does the equilibrium quantity of hazelnuts increase or decrease? 1. The price of almonds, a substitute for hazelnuts, decreases significantly. 2. Hazelnut producers discover a method to pick hazelnuts more efficiently which significantly reduces the cost of hazelnut production. 3. Hazelnut consumers’ incomes increase, and a new location where the climate is appropriate for growing lots of hazelnuts has been discovered. Assume that hazelnuts are a normal good.arrow_forward
- Consider the market for hazelnuts. Use the supply and demand model to explain the effect of the following scenarios on the equilibrium price (P*) and the equilibrium quantity (Q*) of hazelnuts. In each of the following scenarios, does the supply curve shift? Does the demand curve shift? If there is a shift of the supply and/ or the demand curve, in what direction? Show graphically. Does the equilibrium price of hazelnuts increase or decrease? Does the equilibrium quantity of hazelnuts increase or decrease? 1. Adverse weather conditions destroy a large amount of hazelnut trees in Turkey, the leading hazelnut producer in the world. 2. The Italian company Ferrero makes a decision to increase the hazelnut content in its Nutella cocoa hazelnut spread. 3. New research finds that hazelnuts lower cholesterol and improve heart health more than people previously thought, and lots of people become aware of the results of the new study.arrow_forwardGiven the following information about the supply of and demand for apples: Price Quantity demanded (per month) Quantity Supplied (per month) P 0.50 12,000 0 0.75 10,000 2,000 1.00 8,000 4,000 1.25 6,000 6,000 1.50 4,000 8,000 1.75 2,000 10,000 2.00 0 12,000 Plot the demand and supply curves, and determine the equilibrium price and quantity. Assuming the market for apples meets the efficiency condition, show the equilibrium price and quantity that maximizes net benefit to society. Identify the area of consumer surplus and the area of producer surplus.arrow_forwardSuppose the weekly demand and supply curves for used DVDs in Lincoln, Nebraska, are as shown in the diagram: Market for used DVDs Price ($/DVD) A B 0 D E S F G H Quantity (DVDs/week) Use the following values for the graph above: A 8.00 B 7.50 C 7.00 D E F G H I 5.50 4.00 2 4 10 32 Calculate the following at the equilibrium price of $7.00.arrow_forward
- New research demonstrates that celery is a healthy snack. The resulting increase in demand for celery (assuming no increase in supply) at current prices will produce a and the price of celery will steadily shortage, decrease surplus, increase surplus, decrease shortage, increasearrow_forwardAssume coke and Diet Coke are substitute for consumer. What would happen to the equilibrium prices and quantities of both regular and Diet Coke if the price of sugar increasesarrow_forwardSuppose that Felix and Janet are the only suppliers of iced lattes in some hypothetical market. Their monthly supply schedules are given by the following table: Price (Dollars per cup) 1 PRICE (Dolars per cup) N 2 0 3 4 5 Felix's Quantity Supplied Janet's Quantity Supplied (Cups) (Cups) 0 5 4 On the following graph, plot Felix's supply of iced lattes using the green points (triangle symbol). Next, plot Janet's supply of iced lattes using the purple points (diamond symbol). Finally, plot the market supply of iced lattes using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. ? 8 6 7 8 12 40 16 QUANTITY (Cups) 9 12 14 15 8 4 Felix's Supply $ Janet's Supply Market Supplyarrow_forward
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