Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 5.A, Problem 2QE
a)
To determine
Construct new supply and curves with the given changes.
b)
To determine
The
c)
To determine
Mathematical expression of equilibrium price and quantity.
d)
To determine
The effect of government regulation on the market for milk.
Expert Solution & Answer
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For each of the following events described, indicate the effects to the demand and to the supply. Use the
demand and supply graphs provided below to match these events. Then determine what happens to the
market equilibrium price and equilibrium quantity.
Scenario: Consider the market for potato, if potatoes are considered as
inferior good and income rises at the same time that low temperature kills
some potato buds.
Change in Demand *
Increase
Decrease
Did not Change
Indeterminate
Change in Supply *
Increase
Decrease
Did not Change
Indeterminate
Graph *
So
So
Do
Do
A
B
O A
O B
So
So
S1
Do
Do
D
D
So
So
Do
F
O E
F
S.
So
So
D:
Do
Do
G
G
H
So
So
D
Do
Do
D1
J
J
So
Do
D1
-Q
K
K
Change in market equilibrium price.
Increase
Decrease
Did not Change
Indeterminate
Change in market equilibrium quantity.
Increase
Decrease
Did not Change
Indeterminate
Please no written by hand and no image
Draw a demand and supply graph for each of the following questions. For each question, start by drawing a
correctly labeled graph of the market for cookies in equilibrium. Your starting graphs should each have
correctly labeled axes and demand and supply curves. Label the equilibrium price and quantity as p1 and p2
on the axes of each of the starting graphs.
1. Show the effect on the equilibrium price and quantity in the market for cookies if the price of
milk increases. Determine which curve is affected by the change in the price of milk and
whether it increases or decreases. On your graph, draw a new curve indicating the shift-
either to the right or the left. Label the new equilibrium price and quantity as p2 and q2.
2. Show the effect on the equilibrium price and quantity in the market for cookies if the price of
flour decreases. Determine which curve is affected by the change in the price of flour and
whether it increases or decreases. On your graph, draw a new curve indicating…
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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- Suppose the quantity supplied falls, relative to the values given in the table above, by 20 million pounds per month at prices above $5; at a price of $5 or less per pound, the quantity supplied becomes zero. Draw the new supply curve and show the new equilibrium price and quantity.arrow_forwardThe table below shows the monthly demand and supply of gallons of Ghana Nuts Oil at different prices. Use the information in the table to answer the questions that follows: Price per gallon Quantity of gallons demanded Quantity of gallons Supplied 20 5000 1000 25 4000 2000 30 3000 3000 35 2000 4000 40 1000 5000 Use the information in the table to sketch the demand and supply curve on the same axis. (NOTE: Graph sheet is not needed). What is the equilibrium price and quantity? Which of the prices would cause shortages? Calculate the shortages that may occur at those prices. Suppose the Government of Ghana imposes a minimum price legislation which led to surpluses in the oil market, discuss two ways that can be use to address or mitigate the surpluses in the market. Suppose the price of Ghana Nut Oil increase from 20 to 25, calculate the price elasticity of demand and supply of Ghana Nut Oil. Demand and Supply which one is more…arrow_forwardFor each of the following events described, indicate the effects to the demand and to the supply. Use the demand and supply graphs provided below to match these events. Then determine what happens to the market equilibrium price and equilibrium quantity. Scenario: As more and more people bought home computers during the 1990s, the demand for access to the World Wide Web and the Internet increased sharply. At same time, new companies like Earl's began to enter the internet-access market competing with older, more established services such as American Online. Despite a massive increase in demand, the price of access to the Web actually declined. Change in Demand* Increase Decrease Did not Change Indeterminate Change in Supply * Increase Decrease Did not Change Indeterminate Graph * Do Do A B A P So So Do Do So So S: Do E F E So So Di Do Do G O G Он So S1 So Do Do Q So Do D1 -Q K O K Change in market equilibrium price. * Increase O Decrease Did not Change O Indeterminate Change in market…arrow_forward
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