ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 5P
To determine
Law of supply, supply curve, and the relation between the law of supply and supply curve.
Concept Introduction:
Law of supply states that as the
Supply curve shows all the possible combinations of the quantity supplied and price of the good.
Expert Solution & Answer
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13. Supply and Demand
Consider the following events: Researchers shows that eating lobsters increases the risk of heart attack, and at the same time, there is a new
regulation that limit the number of lobsters people can fish.
Show the effect of these two events on the market for lobsters.
Supply
Demand
Supply
Demand
Quantity of Lobsters
When the demand curve and supply curve shift in the directions indicated on this graph, you can be certain about the effect on
without knowing the magnitude of the shifts.
Price of Lobsters
7. Determinants of supply
The following calculator shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the
same price. Two factors that affect the supply of sedans are the level of technical knowledge in this case, the speed with which manufacturing robots
can fasten bolts, or robot speed-and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve
when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Thousands of dollars)
o
50
40
30
20
ō
0
0
Supply
100 200 300 400 500 600 700 800 900
QUANTITY (Sedans per month)
Graph Input Tool
Supply for Sedans
Price of a Sedan
(Thousands of…
3. Changes in the supply of sedans
The following graph shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the
same price. Two factors that affect the supply of sedans are the level of technical knowledge-in this case, the speed with which manufacturing robots
can fasten bolts, or robot speed-and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve
when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Graph Input Tool
(?
Supply for Sedans
50
I Price of a Sedan
(Thousands of
dollars)
25
40
Supply
Quantity Supplied
(Sedans per month)
450
30
SUPPLY SHIFTERS
20
Robot Speed
(Bolts per…
Chapter 4 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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Similar questions
- Using Exercise 16.20, sketch the effects in parts (a) and (b) on a single supply and demand diagram. What prediction would you make about how the improved information alters the equilibrium quantity and price?arrow_forwardWhat is the difference between the supply and the quantity supplied of a product, say milk? Explain in words and show the difference on a graph with the supply curve for milk.arrow_forwardName some factors that can cause a shift in line demand curve in markets for goods and services.arrow_forward
- (Figure: Market for Tropicana Juices) Tropicana produces both orange juice and lemonade. What will happen to the supply of Tropicana orange juice when the price of lemonade rises in the market and the price of orange juice stays the same? Price Price Price Price Supply Supply Old Old price New New price supply supply New Old Old price New price supply B supply Quantity New quantity quantity Old Quantity Quantity Old quantity quantity New Quantity O Graph D O Graph C O Graph A O Graph Barrow_forward(Figure: Demand and Supply of Sugar) Use Figure: Demand and Supply of Sugar. When the supply curve shifts from Sj to Sz. the new intersection of supply and demand indicates an equilibrium price ofand an equilibrium quantity of 4,000. This supply shift could have resulted from Price (per pound) $50 40 S2 30 25 20 15 10 100 200 300 400 500 600 Quantity of sugar (per month) $15; an increase in wages O$15; an improvement in sugar refining technology O$20; an increase in the number of buyers O$20; an increase in sugar pricesarrow_forward12. Shifts in supply or demand II The following graph shows the market for hamburgers in Halifax, where there are more than a thousand burger joints at any given moment. Suppose an innovation in meat processing technology makes it possible to produce more hamburgers at a lower cost than ever before. Show the effect of this change on the market for hamburgers by shifting one or both of the curves on the following graph, holding all else constant. Supply Demand Supply Demand QUANTITY (Hamburgers) PRICE(Dollars per hamburger)arrow_forward
- 16. Determinants of supply The following graph shows the supply curve for sedans in an imaginary market. Assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the technology-the speed with which auto-manufacturing robots can fasten bolts, or "robot speed"-and the wage rate that auto manufacturers pay their employees. Initially, the graph shows the supply curve when robots can fasten 1,000 bolts per hour and autoworkers earn $35 per hour. Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in the grey field will change accordingly. Graph Input Tool Market for Sedans 50 45 I Price of a Sedan (Thousands of dollars) 22 40 Supply 35 Quantity Supplied (Sedans per month) 315 30 25 Supply Shifters 20 Robot Speed (Bolts per hour) 15 1000 10 Autoworker Wage (Dollars per…arrow_forward15. Another supply and demand puzzle The market price of cheeseburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several burger joints in the area have recently gone out of business. Other students attribute the increase in the price of cheeseburgers to a recent increase in the price of calzones at local pizza parlors. Everyone agrees that the increase in the price of calzones was caused by a recent increase in the price of pizza dough, which is not generally used in making cheeseburgers. Assume that burger joints and pizza parlors are entirely separate entities-that is, there aren't places that serve both cheeseburgers and calzones. The first group of students thinks the increase in the price of cheeseburgers is due to the fact that several burger joints in the area have recently gone out of business. On the following graph, adjust the supply and…arrow_forward7. Draw the supply and demand curve for pencils. Clayton county provides every student with a laptop at school. What happens to the supply and demand for pencils. Why?arrow_forward
- 6. Shifts in supply or demand I The following graph shows the market for cereal in Detroit, where there are over a thousand stores that sell cereal at any given moment. Suppose the price of breakfast bars increases. (Assume that people regard cereal and breakfast bars as substitutes.) Show the effect of this change on the market for cereal by shifting one or both of the curves on the following graph, holding all else constant. PRICE (Dollars per box) QUANTITY (Boxes) Supply Demand Demand 0 Supplyarrow_forward12. What is the difference between a change in supply and a change in quantity supplied? A (change in supply) or to the right (an increase in supply). A change in supply, therefore, is a change in the entire supply schedule or curve. ) is a shift in the entire supply curve either to the left (a decrease in In contrast, a ( change in schedule from one price-quantity combination to another. A change in product price causes the change in quantity supplied. ) is a movement along an existing supply curve or PA P (Increase, Decrease) in (Increase, Decrease) inarrow_forward(Figure: The Supply of Apple TV Rentals) Use Figure: The Supply of Apple TV Rentals. An increase in the price of online movie rentals would result in the change illustrated by the move from: Price of Apple TV rental 0 Price of Apple TV rental n (a) Quantity (per period) (c) Quantity (per period) Price of Apple TV rental Price of Apple TV rental. 0 (b) S₂ S₁ Quantity (per period) (d) Quantity (per period)arrow_forward
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