Cause for the simultaneous rise in the price and quantity in the economy.

Question

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Answer 1

Question

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

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Students have asked these similar questions

1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically. 2. Consider the following table of long-run total costs for three different firms: Quantity Total Cost ($) Firm A Firm B Firm C 1 60 11 21 2 70 24 34 3 80 39 49 4 90 56 66 5 100 75 85 6 110 96 106 7 120 119 129 Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer with necessary calculations.

Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.

1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically.

Answer 2

Question

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

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Answer 3

Question

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

Answer 6

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

Answer 7

Chapter 5, Problem 1QE

To determine

Cause for the simultaneous rise in the price and quantity in the economy.

Answer 8

Expert Solution & Answer

Explanation of Solution

The equilibrium price and quantity demanded in the economy are obtained at the intersection of the demand and supply curve in the economy. Thus, any shift in the demand or supply curves or the changes in both causes the equilibrium to change in the economy.

When the demand increases, the economy would face a temporary shortage of goods and services, which will increase the general price level in the economy. The increased demand and price influence the suppliers to increase their supply in order to earn higher revenue from the market. Thus, the simplest cause for the increase in the equilibrium price and quantity will be the rightward shift in the demand curve in the economy.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Market equilibrium: Market equilibrium is obtained at the point where the market demand equals with the market supply in the economy. There will be no excess or shortage in the economy when the economy is in its equilibrium.

Answer 12

Ch. 5.1 - Prob. 1Q Ch. 5.1 - Prob. 2Q Ch. 5.1 - Prob. 3Q Ch. 5.1 - Prob. 4Q Ch. 5.1 - Prob. 5Q Ch. 5.1 - Prob. 6Q Ch. 5.1 - Prob. 7Q Ch. 5.1 - Prob. 8Q Ch. 5.1 - Prob. 9Q Ch. 5.1 - Prob. 10Q

Cause for the simultaneous rise in the price and quantity in the economy.

Cause for the simultaneous rise in the price and quantity in the economy.

Explanation of Solution

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