Principles of Macroeconomics, Loose-Leaf Version
8th Edition
ISBN: 9781337096881
Author: Mankiw, N. Gregory
Publisher: South-Western College Pub
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 7PA
Subpart (a):
To determine
To draw:The
Subpart (b):
To determine
The impact of
Subpart (c):
To determine
Whether producer or consumers of TVs benefits most when the production costs decreases.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The elasticity of Supply is an important concept in Microeconomics as it relates to a business's ability to adjust its production and its production facility in response to market developments. Think of some examples of products and businesses that would have various degrees of Elasticity of Supply and share them here.
For example, what would be the Elasticity of Supply for an original piece of art? What does this imply for the adjustment in this market to a change in Demand?
How would you describe the Elasticity of Supply for a product such as peaches, plums, and other tree fruit? Consider first a brief period, such as weeks, and next a much longer period such as five years. How does the time horizon influence market adjustment when there is a change in Demand?
Draw a graph that indicates what happens in the market for hybrid cars when the price of gasoline increases from $2.50 to $5.00 per gallon. Answer the following questions: a) Does equilibrium output rise or fall? b) Does equilibrium price rise or fall? c) Suppose the supply of hybrid cars is perfectly inelastic. Draw a new graph and explain if and how the elasticity of supply changes your answers to parts “a” and “b”.
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
True or False: Suppose you are advising the Dairy Farmers of Canada on changes in
the milk market. Suppose the current price is $4.5 per gallon of milk and the quantity
demanded is 2.5 million gallons of milk per day. Suppose price elasticity of demand is
constant at 0.7. You are considering reducing the supply, so that the price rises to $5
per gallon. Total expenditure on milk by consumers will rise.
Chapter 7 Solutions
Principles of Macroeconomics, Loose-Leaf Version
Knowledge Booster
Similar questions
- Suppose that when price is 10, quantity supplied is 20 units, and when the price is 6, the quantity supplied is 12 units. What is the price elasticity of supply? a. 0.5 b. 0.8 c. 1.0 d. 1.5arrow_forwardIf the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?arrow_forwardGasoline & Politics In the spring of 2008, Senators John McCain and Hillary Clinton (who were then running for president) proposed a temporary elimination of the federal gasoline tax, effective only during the summer of 2008, in order to help consumers deal with high gasoline prices. Assume that during the summer, when gasoline demand is high because of vacation driving, gasoline refiners are operating at full capacity. What does this assumption suggest about the price elasticity of supply? In light of your answer to the previous question, whom do you predict would benefit from the temporary gas tax holiday?arrow_forward
- The average ticket price for a concert at the opera house was $30. The average attendance was 5000. When the ticket price was raised to $33, attendance declined to an average of 4700 persons por performance. What should the ticket price be to maximize revenue for the opera house? (Assume a linear demand curve.) To maximize revenue, the price should be $ por ticket. (Type an integer or decimal rounded to two decimal places as needed. Simplify your answer.)arrow_forwardThe graph below represents the supply of Good X. The numbers on the chart show the percent changes in price and quantity moving along the supply curve. The numbers below the horizontal lines indicate the percent change in quantity, while the numbers to the right of the vertical lines indicate the percent change in price. c Price Supply E D 35% 25% 30% 30% B A 32% 30% 37% 35% Show Transcribed Text Quantity Which portion of the supply curve for Good A is unitary elastic? Select the correct answer below: Point A to Point B Point B to Point C Point C to Point D Point D to Point Earrow_forwardIn the last six months, the price of fuel for cars has increased very substantially in many countries. Explain why we might expect demand to be more price elastic in the long-run than in the short-run.arrow_forward
- Why might one expect the elasticity of supply of a commodity to be greater in the long run than in the short run?arrow_forwardStudies have fixed the short-run price elasticity of demand for HPV vaccines at -0.25 . Suppose that transportation issues lead to a sudden cutoff of vaccine supplies. As a result, supplies of HPV vaccines drop 20 percent. a. If HPV vaccines were selling for 130 dollar per dose before the cutoff, how much of a price increase would you expect to see in the coming months? b. Suppose that the government imposes a price ceiling on HPV vaccines at 130 dollar per dose. How would the relationship between vaccine recipients and hospital/clinic owners change?arrow_forwardThe graph shows the supply and demand curves for a certain product, which has a current selling price of $ 500. The laws of supply and demand most support which conclusion about the product?arrow_forward
- Please discuss this statement: “a drought around the world raises the total revenue that farmers receive from the sale of grain, but a drought only in Queensland reduces the total revenue that Queensland farmers receive”. Explain the characteristics of demand and supply that determine changes in total revenue, considering different time periods.arrow_forwardF). Draw a perfectly inelastic supply, an inelastic supply, a unit elastic supply, an elastic supply, and a perfectly elastic supply curves. G). Suppose that you are a seller, based on your preferences and other things being equal, would you prefer to see a relatively more elastic or inelastic demand curve? How about the same question for the supply curve? Explain.arrow_forwardDescribe how the elasticity of demand behaves in the long run?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMacroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning