EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 8220100605932
Author: Blinder
Publisher: Cengage Learning US
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Question
Chapter 4, Problem 6TY
(a)
To determine
The change in supply curve of cell phone.
(b)
To determine
The changes in the market for smart phone.
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Consider the markets for film streaming services, TV screens, and tickets at movie theaters.
a. For each pair, identify whether they are complements or substitutes:
Film streaming and TV screens
Film streaming and movie tickets
TV screens and movie tickets
b. Suppose a technological advance reduces the cost of manufacturing TV screens. Draw a diagram to show what happens in the market for TV screens.
c. Draw two more diagrams to show how the change in the market for TV screens affects the markets for film streaming and movie tickets.
Other things equal, which of the following would NOT shift the supply curve for gasoline?
Select one:
a.
an increase in the price of gasoline.
b.
an improvement in refining techniques that allows more gasoline to be squeezed out of a barrel of crude oil
c.
a fall in the price of crude oil (from which gasoline is refined)
d.
an increase in the wages paid to people working in oil refineries.
a. Use supply and demand to graphically illustrate the equilibrium price and quantity of Pizza Hut pizza.
b. Assume the price of Domino’s pizza increases. Domino’s and Pizza Hut may be viewed as substitutes. Illustrate and explain how the equilibrium market for Pizza Hut pizza will change.
Chapter 4 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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Similar questions
- 1. In your own words, explain the horizontal and vertical interpretation of the demand curve. 2. What is the difference between substitute goods and complementary goods? How do they influence the demand for products?arrow_forwardWhat happens to the quantity of smartphones supplied and the supply of smartphones if the price of a smartphone rises? Draw a supply curve of smartphones. Label it. Use any prices and quantities you wish but make your supply curve obey the law of supply. Then draw an arrow to indicate what happens to the quantity of smartphones supplied when the price of a smartphone rises. A rise in the price of a smartphone OA. does not change; does not change OB. increases; increases OC. does not change; increases incroscoe dinge not channe the quantity supplied and supply. 500 450- 400- 350- 300- 250 200 150 100- Price (dollars per smartphone) 50- 0- 0 Quantity (millions of smartphones per yearrow_forwardIllustrate the effect on the equilibrium price and quantity using supply and demand curves. Be sure to label everything. Use the 4 step process. a) The effect of an increase in the price of lumber on the market for newly constructed homes b) The effect of a decrease in the price of chicken on the market for beef (assume they are substitutes) c) The effect of an increase in income on the market for ramen noodles (assume they are inferior goods)arrow_forward
- Exercise 3. Tablets and laptops are substitutes. Due to manufacturer related issues, there is a deep shortage of tablet-specific parts. What would you expect to happen to the market (prices, supply, demand, quantity sold) shortly after the parts shortage in for each of the following products: Tablets? Laptops? You can answer each point above with a labeled graph or explain in words, taking into account the differences between a change in the demand (curve) and a change in quantity demanded.arrow_forwardOnly typed answer and please answer correctlyarrow_forwardSuppose that the table on the right shows the quantity demanded of UGG boots at five different prices in 2014 and in 2015. Which of the following variables could cause the quantity demanded of UGG boots to change as indicated from 2014 to 2015? (Check all that apply.) A. An increase in the price of UGG boots B. A decrease in the price of a substitute good C. A decrease in the number of buyers D. The expectation that UGG boots will rise in price Price $160 170 180 190 200 Quantity Demanded 2014 5000 4500 4000 3500 3000 Quantity Demanded 2015 4000 3500 3000 2500 2000arrow_forward
- Consider the markets for film streaming services,TV screens,and tickets at movie theaters.a.For each pair,identify whether they are complements or substitutes:Film streaming and TV screens.Film streaming and movie ticketsTV screens and movie ticketsb.Suppose a technological advance reduces the cost of manufacturing TV screens.c. Draw two more diagram to show how the change in the market for TV screens affects the markets for film streaming and movie tickets.arrow_forwardUse the supply schedule below to answer the questions that follow. Supply of Flower Bouquets Price (dollars per Quantity of Bouquets bouquet) Supplied $40 90 35 70 30 50 25 30 20 15 10 0 Instructions: Enter your answers as a whole number. a. What is the quantity of bouquets supplied if the market price is $35? bouquets of flowers b. Suppose the market price rises from $35 per bouquet to $40 per bouquet. The quantity of bouquets supplied will (Click to select) by bouquets.arrow_forwardTablets and laptops are substitutes. Due to manufacturer related issues, there is a deep shortage of tablet-specific parts. What would you expect to happen to the market (prices, supply, demand, quantity sold) shortly after the parts shortage in for each of the following products: a. Tablets?b. Laptops? You can answer each point above with a labeled graph or explain in words, taking into account the differences between a change in the demand (curve) and a change in quantity demanded.arrow_forward
- a. Do you agree with the following statements? Explain your answers. i. The price of butter rises, causing the demand for another good to fall. This implies that the goods are substitutes. ii. During the pandemic, incomes fell for many Bahamians this change would likely lead to a decrease in the prices of both normal and inferior goods. iii. If the demand and supply of lobster increases at the same time price will rise. iv. The price of milk falls. This causes an increase in the price of good cheese. Therefore, milk and cheese are complements.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_forwardThe graph shows the demand for and supply of potato chips. Draw a curve that shows the effect of a new dip that increases the quantity of potato chips that people want to buy by 30 million bags per week at each price. Label the curve 1. Draw a curve that shows the effect of a virus that destroys potato crops and decreases the quantity of potato chips produced by 40 million bags a week at each price. Label the curve 2. Draw a point at the new equilibrium price and quantity following both events. How do the equilibrium price and equilibrium quantity change when the increase in demand is greater than the decrease in supply? The equilibrium price and the equilibrium quantity. OA. falls; decreases; OB. rises; decreases; OC. falls; increases; OD. rises; increases; How do the equilibrium price and equilibrium quantity change when the increase in demand is less than the decrease in supply? The equilibrium price and the equilibrium quantity 115 105- 95- 85- 75- 65- 55- Price (cents per bag) Sb…arrow_forward
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