Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 4QAP
To determine
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Some have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.”Do you agree or disagree with this view?
Disagree - the reduction in demand will push the equilibrium price below its original level.
Disagree - this confuses a change in demand with a change in quantity demanded.
Agree - the price increase will ultimately leave cigarette consumption unchanged.
Disagree - higher cigarette prices will actually increase the demand for cigarettes.
Suppose one of your friends offered the following argument: a rightward shift in demand will cause an increase in price. The increase in price will cause a rightward shift of the supply curve, which will lead to an offsetting decrease in price. Therefore, it is impossible to tell what effect an increase in demand will have on price. Do you agree with your friend? If not, what is the flaw in your friend’s reasoning?
More than 20 states have laws outlawing price gouging during a state of emergency, which might be declared after a
hurricane or an earthquake. These laws prohibit price increases on basic necessities, such as gasoline. Which of the
arguments against price ceilings might not be significant during a state of emergency?
It might be the case that during an emergency, consumers have little concern over the quality of a good that is
available.
It might be the case that during an emergency, consumers have little concern over the quantity of a good that is
available.
It might be the case that during an emergency, consumers have lttle concern over the price of a good that is
available
It might be the case that during an emergency, consumers have little concern over the location of a good that is
available.
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
- Hi! I'm fairly confident that the answer here is none of these, but I want to be as thorough as possible in reviewing for my exam.arrow_forwardExplain as completely as you can what an economist means by supply?arrow_forwardIn the basic supply-and-demand model, a buyer only purchases a good when? if the price is lower than it was previously. if the price of the good covers the producers’ costs of production. if the price is less than they are willing to pay. if doing so increases the well-being of society. if they are forced to do so.arrow_forward
- Supply and Demand The law of demand and supply are important in business. The law of demand states that as price of a good or service increases, the quantity demand decreases and vice versa. While the law of supply states that as prices of goods and services increase, the quantity supplied increases. The law of demand is a good concept for businesses when setting prices. As businesses raise prices, consumers may buy less of the product because their incomes are mostly stagnant. For example, a parent may buy 4 loaves of bread at $2 each which is $8, but may decide to only buy 2 loaves of bread when the price of a loaf of bread increases to $4. This is because the parent’s income is stagnant and he or she has allocated only $8 for bread. Discussion question The law of demand states that as the price of a good or service increases, the quantity demanded goes down and vice-versa. Share an example of a good or service that follows the law of demand. Give an example of goods or services…arrow_forwardCar Manufacturer Scenario: Be specific and explain why you came to that conclusion using the principles of supply and demand.arrow_forwardTrue/False Market price is an macroeconomic concept.arrow_forward
- The drug war There is a debate in the US and in Europe as to how to influence the market for drugs such as cocaine. Some argue that the answer is to reduce the supply of drugs from Colombia – which would otherwise eventually find their way onto the world markets – by giving aid to the Colombian government to fight the drug suppliers. If this is successful, it will drive up the price of cocaine on the streets. Higher prices mean that fewer people will be willing and able to buy drugs, resulting in a fall in demand. This scenario can be seen in Figure 1.13(a) where a successful anti-drug policy in Colombia would decrease supply, i.e. shift the supply curve for cocaine upwards and to the left so that there is an excess demand for cocaine at price P. This will result in a rise in the equilibrium price of cocaine from P to P1. The quantity demanded will contract along the demand curve D from Q to Q1 as price rises from P to P1. Critics of these ideas argue that programmes…arrow_forwardAccording to the figure, what combination would have caused equilibrium to move from point A to point E? 70 60 50 28 Price (S) 40 40 30 20 10 10 <α 0 5 10 15. Quantity a shift in supply to the left and a shift in demand to the left a shift in supply to the right and a shift in demand to the left a shift in demand to the right and a shift in supply to the left a shift in supply to the right and a shift in demand to the right.arrow_forwardAnswer the questions below about the Wall St Journal video – How the Pandemic Is Accelerating Changes in Your Packaging. In typical economist fashion, let’s simplify the analysis by assuming that there is only one online product called NOZAMAs that is delivered to consumers. The market for NOZAMAs has demand and supply curves of the usual shape.A) Draw a diagram of the NOZAMAs market in an initial equilibrium, and label the axes and the curves. When the pandemic starts, how would you explain what happens in terms of the five factors that can change market demand? Show what happens on the diagram, all other things unchanged. Explain the sequence of events in words, using correct terminology to distinguish between changes in demand or supply, versus changes in quantity demanded or quantity supplied.B) Pandemic pressures increased the price of cardboard packaging. In economic terminology, what kinds of products are cardboard packaging and NOZAMAs? Which elasticity concept captures the…arrow_forward
- When an economist states the supply of a product has decreased, he or she has concluded that a) A smaller quantity will be produced at every price b) The price is too high for equilibrium c)a greater quanity will produced at every price d) the price is too low equilibrium. e) demand was too high for producers to make a profit.arrow_forwardWhat is a relevant example of how a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service? Explain. Next, find a relatively recent news article (within the past year) to support your finding (the news search feature in Google is helpful with this). If you cannot find an article specific to your example, you may find an article about another similar good or service. Talk about the article and its findings, then include the URL.arrow_forwardSince 2019, the price of lithium in China has been falling (and it is predicted to continue falling through 2020). Assume nothing else is happening (the only thing changing is the price). As the price falls, demand for lithium in China falls True or false?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
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
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning