Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 4TY
The following table summarizes information about the market for principles of economics textbooks:
- a. What is the
market equilibrium price and quantity of textbooks? - b. To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now?
- c. While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.
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Price
$ 10.00
20.00
30.00
40.00
50.00
60.00
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Quantity
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28
24
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जी
Listed below are several items which would affect the market for personal computers. For each event, do the following: 1) Tell whether the event shifts
demand or supply, 2) tell whether the curve increases or decreases, and 3) report the predicted change in price and quantity of personal computers.
a) A fall in the price of software
b) A government subsidy to computer makers
c) A decrease in consumers' income due to a recession
d) An increase in the price of silicon (used in making all kinds of computer chips like CPU's, memory chips, etc.).
For each of the following events described, indicate the effects to the demand and to the supply. Use the
demand and supply graphs provided below to match these events. Then determine what happens to the
market equilibrium price and equilibrium quantity.
Scenario: Consider the market for potato, if potatoes are considered as
inferior good and income rises at the same time that low temperature kills
some potato buds.
Change in Demand *
Increase
Decrease
Did not Change
Indeterminate
Change in Supply *
Increase
Decrease
Did not Change
Indeterminate
Graph *
So
So
Do
Do
A
B
O A
O B
So
So
S1
Do
Do
D
D
So
So
Do
F
O E
F
S.
So
So
D:
Do
Do
G
G
H
So
So
D
Do
Do
D1
J
J
So
Do
D1
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K
K
Change in market equilibrium price.
Increase
Decrease
Did not Change
Indeterminate
Change in market equilibrium quantity.
Increase
Decrease
Did not Change
Indeterminate
Chapter 4 Solutions
Economics: Principles & Policy
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