Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 5, Problem 17QE
(a)
To determine
The
(b)
To determine
The equilibrium price and quantity in the market with the third party payer.
(c)
To determine
The total spending in consumer market and in third party payer market.
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QUESTIONS: Scenario 1: As part of an international trade agreement, the Oman government reduces the tax on imported coffee. a. Will this affect the supply or the demand for coffee? Why? b. Which determinant of demand or supply is being affected? Explain. c. Show graphically the effect of changes in demand or supply. d. How will this change the equilibrium price and quantity of coffee? Explain your reasoning. Scenario 2: The Ministry of health publishes a study finding that coffee drinking reduces the probability of getting cancer. a. How do you imagine this will affect the market for coffee? Why? b. Which determinant of demand or supply is being affected? Explain. c. Show graphically the changes in demand or supply. d. Will this change the equilibrium price and quantity of coffee? Explain your reasoning.
On the market for cherries, supply is inelastic, while demand is elastic. You know that suppliers are not ready to supply any cherries when the price is below $1.5 per pound.
a) On a graph, show the equilibrium price and the equilibrium quantity. Make sure you label the axes and the curves. Then, show the consumer surplus and the producer surplus.
b) Strawberries and cherries are substitutes. The price of strawberries increased. On a graph,show what will happen on the market for cherries. Show the change in the consumer surplus. Show the change in the producer surplus.
c) Forget about part (b). There are issues with the supply chain: transportation companies raise the fees they charge to deliver cherries from the farms to the supermarkets. On a graph, show what will happen on the market for cherries. Show the change in the consumer surplus. Show the change in the producer surplus
You will analyze the Market for Gasoline
Step 1: Draw a supply-and-demand diagram. Price is on the vertical axis, quantity is on the horizontal axis, demand is downward-sloping, supply is upward-
sloping, and be sure to label equilibrium price and equilibrium quantity.
Step 2. Change colors! If you have a highlighter or colored pencil (crayon, sharpie, whatever).
Step 3. Show the change in demand or supply (only one curve will shift in each scenario). State if the curve decreases or increases.
Step 4: Show the new equilibrium price and equilibrium quantity.
Step 5: Repeat Steps 1-4 for each scenario. You will have a total of 4 graphs.
Scenario A: A hurricane destroys refineries that produce gasoline.
Scenario B: Consumers purchase electric vehicles that do not need gasoline.
• Scenario C: Technological innovation occurs that reduces the cost of producing gasoline.
Scenario D: Road trips become the one and only vacation option and many families opt for long-distance road trips.
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Chapter 5 Solutions
Microeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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