Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter P2, Problem 2KC
To determine
The impact of decrease in the price of tobacco on the soybeans.
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Assume the market for organically-grown produce is perfectly competitive. All else being equal, as farmers find it less profitable to produce and sell organic produce in this market,
Select one:
a. the demand curve will shift to the left and the equilibrium price will decrease.
b. the supply curve will shift to the left and the equilibrium price will increase.
c. the supply curve will shift to the right, the demand curve will shift to the left, and the equilibrium price will decrease.
d. the supply curve will shift to the left, the demand curve will shift to the left, and the equilibrium price will increase.
e. the demand will shift to the right and the equilibrium will price neither increase nor decrease
Carefully explain what is happening in the following markets. Indicate the impact if any on demand, supply, price and quantity.
In the market for airline tickets airline carriers have drastically cut fares for international air travel resulting in a 3% increase in ticket sales. Meanwhile, recent health considerations due to COVID-19 have caused and 11% reduction in the demand for international travel.
(i) Impact on Supply?
(ii) Impact on Price?
(iii) Impact on Quality?
(iv) Impact on Demand?
Test I. Market Equilibrium
Essay. The oil production currently have a 5% reduction in the world's supply of crude oil due to the increased tensions in the Middle East. Explain the likely impact of this event on the market for gasoline and the market for small cars. Hint: Explain the market equilibrium for the change in demand and change in supply.
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Similar questions
- 2. Consider the regional supply curve of farmers who produce a particular crop. a. What does the supply curve look like at the time the crop is harvested? (Show a plausible graph.) b. Depict the crop's supply curve at the beginning of the growing season (when farmers must decide how many acres to cultivate). c. Depict the crop's supply curve in the long run (when farmers can enter or exit the market).arrow_forwardThe development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right. A.True B.Falsearrow_forwardConsider the market for minivans. Indicate the impact if any on demand, supply, price and quantity: (a) People decide to have more children. (b) A strike by steelworkers raises steel prices. (c) Engineers develop new automated machinery for the production of minivans. (d) The price of station wagons rises. (e) A stock-market crash lowers people’s wealth acarrow_forward
- Market power refers to the a. side effects that may occur in a market. b. government regulations imposed on the sellers in a market. c. ability of market participants to influence price. d. forces of supply and demand in determining equilibrium pricearrow_forwardHand written solutions are strictly prohibited.arrow_forwardFigure 4.5 shows the supply curves of a non-durable good. A shift from the supply curve S to S' could be caused by: Figure 4.5 Price Quantity a. several competing producers going out of business. b. an increase in the current price of the product. c. an expectation of a higher product price in the future among suppliers. d. a patent application that restricts the use of a particular production technology. e. a decrease in consumer income." isarrow_forward
- An agreement is reached by OPEC to reduce the supply of oil on world market for oil. Usedemand and supply curves to illustrate and explain the impact this will have on the marketfor oil. How will it affect the equilibrium price and quantity of oilarrow_forwardSolve these equations in photosarrow_forwardConsider the market for corn. Indicate whether each of the following events will cause a rightward shift in the demand curve (select all that apply). A A drought hits corn-growing regions, cutting the supply of corn. B The government announces a new subsidy for biofuels made from corn. A global recession reduces the incomes of consumers in poor countries, who rely on corn as a staple food (assuming corn is a normal good). D A new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre. E An advertising campaign by the beef producers' association highlights the health benefits of corn-fed beef.arrow_forward
- Extra Problems - I - In a given market the supply curve is based on the following: producers an suppy at a price of 10 up to a quantity of 100. No more than 100 can be applied. Producers will not supply if price is below 10. The demand curve QD=A-20p. Graph the supply curve and interpret it. . Now determine A such that the market "just exists" - this the smallest value of A such that an infinitesimal amount will be sold. You can use graphs to help with this; for example, graph the demand curve for a given guess at A and see whether or not the market exists. . Determine the range of values of A for which the market "maxes out" and the maximum feasible amount is sold.arrow_forwardQuantity Demanded Quantity Supplied Price per Pair of Running Shoes $45.00 100 40 $75.00 80 50 $100.00 60 60 $126.00 $150.00 40 70 20 80 What is the market equilibrium price for running shoes? $75 $115 $125 $100arrow_forwardQ.1.7 If there is a strike in the milk production industry, then, ceteris paribus; (a) the demand for milk will increase.(b) the demand for milk will decrease.(c) the supply of milk will decrease.(d) the supply of milk will increase. Q.1.8 An increase in demand: (a) indicates that more is demanded at higher prices.(b) indicates that more is demanded at lower prices.(c) is illustrated by a rightward shift of the demand curve.(d) is illustrated by a leftward shift of the demand curve.arrow_forward
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