Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Chapter 4, Problem 5QE
To determine
Explain the law of supply and the direct relation between demand and price.
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Consider the demand for pomegranates in two different countries. In Country A, pomegranates are a critical part of the diet and are central to preparation of many recipes. For most of these recipes, there is no feasible substitute for pomegranates. In Country B, households will purchase pomegranates if the price is right, but consumers do not consider them to be particularly special or unique, and few dishes use pomegranates. Suppose pomegranates are native to both countries and due to limited shipping options are not traded. Also suppose that droughts and other weather-related shocks periodically cause unexpected changes in supply conditions.
Use the information above sketch a model of how the market for pomegranates in Country A and in Country B would respond to the supply volatility in each country. Then, use your findings to plot the price of pomegranates across time in Country A and Country B. Explain which country will see more volatile prices and why.
Q9
Consider the demand for shrimp shown in Figure 2. Suppose the current demand for shrimp is D (in black), the current price of a pound of shrimp is $10, and the current quantity demand for shrimp is 200K. Which of the following correctly describes the effect of an increase in the price of a pound of shrimp?
A) The price of a pound of shrimp rises to $15, the demand curve shifts left to D'' (red), and the quantity demand for shrimp remains at 200K pounds.
B) The price of a pound of shrimp rises to $15, the demand curve remains at D (black), and the quantity demand for shrimp decreases to 150K pounds.
C) The price of a pound of shrimp rises to $15, the demand curve shifts right to D' (blue), and the quantity demand for shrimp increases to 270K pounds.
D) The price of a pound of shrimp rises to $15, the demand curve remains at D (black), and the quantity demand for shrimp increases to 270K.
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
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