Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
Question
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Chapter 5.A, Problem 5QE

a)

To determine

The equilibrium price and quantity of wheat.

b)

To determine

The effects of a government set price of $5.

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Assume that we are looking at the market for snowblowers in December. The initial equilibrium is at a price of $500 and quantities of 1,000. Assume that December begins with three massive blizzards, how might this impact the snowblower market?  Demand will shift to the right, causing a surplus, which causes prices to increase until we end up with higher prices and a greater quantity.   Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a lessor quantity.  Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a greater quantity.  Demand will shift to the right, causing a shortage, which causes prices to decrease until we end up with higher prices and a greater quantity.
Suppose the price of gasoline is $1.60 per gallon. Is the quantity demanded higher or lower than at the equilibrium price of $1.40 per gallon? What about the quantity supplied? Is there a shortage or a surplus in the market? If so, how much?
Q. Show and describe what would happen to the demand or quantity demanded or quantity supplied or supply for a good in each of the following cases: a) a. an increase in the price of a substitute of your product, an increase in the number of suppliers and an increase in subsidies I b) b. an increase in the price of a complement, an increase in input prices and increasing costs of regulation. c) c. an increase in income, for a normal good, Freezing weather wipes out wheat crops in California
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