QUESTION 7 12. Refer to Figure 9.5. Suppose the economy is a point B. A large increase: AS AS decrease, AS AS decrease AS increase AS AS Price level, P 150 481 Real GDP, Y Figure 9.5 in the supply of labor leads to a shift from 482 to
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- In the financial market, what causes a movement along the demand curve? What causes a shift in the demand curve?Table 4.6 shows the amount of savings and barrowing in a market for loans lo purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? How can you tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be 10 million less supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain why the direction of the interest tale shift makes intuitive sense.As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.
- We know that a change in the price of a product causes a movement along the demand curve. Suppose consumers believe that prices will be rising in the future. How will that affect demand for the product in the present? Can you show this graphically?In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve?Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying these loans. Because of a threat of a war, people become uncertain about their economic future. The overall level of saving, in the economy diminishes. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.
- Suppose that the president proposes a new lawaimed at reducing healthcare costs: All Americans arerequired to cat one apple daily.a. How would this applc,-a.day law affect thedemand and equilibrium price of apples?b. How would the law affect the marginal product andthe value of the niaI)lll,al product of apple pickers?c. How would the law affect the demand andequilibrium wage for apple pickers?use tne grapn input tooi to neip you answer tne roilowing questions. You will not be gradea on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Florida Oranges 50 46 Supply IPrice (Dollars per box) Quantity 20 40 35 Quantity Supplied (Millions of Бохes) 30 480 320 Demanded (Millions of boxes) 25 20 15 Demand 10 O 80 160 240 320 400 480 GEO 640 720 B00 QUANTITY (Millions of baxes) In this market, the equilibrium price is $ per box, and the equilibrium quantity of oranges is million boxes. For each price listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price (Dollars per box) Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) Shortage or Surplus Pressure on Prices 35 15 True…Last year, 1000 galions of almond milk (a non-dairy product) were sold at a price of $10 Yet, this year, a bad harvest in Califomia has wiped out a significant part of the aimond harvest At the same tme, a larger number of people are looking to shift away from dairy products towards non-dairy atematives. Because of these two changee, O the equilbrum price will increase and change in the equlbrum quantity is unambiguous O he equtibrium price will decrease but change in the equilbrum quantity is ambiguous O he change in the equiibrium price is ambiguous, but the equilbrium quantty wil increase O he equiibrium price will increase but change in the equilbrum quantity is ambiguous
- 8. Suppose the computer industry receives an initial extra income for $100. Think about the multiplier process in the first round. ii). How much income will local workers receive? O. $20 O. $25 0. $45 O. $55Use graphs to demonstrate the effect of ashift in supply or demand, and describe what causesthese curves to shiftSuppose that the president proposes a new lawaimed at reducing healthcare costs: All Americans arerequired to eat one apple daily.a. How would this apple-a-day law affect thedemand and equilibrium price of apples?b. How would the law affect the marginal productand the value of the marginal product of applepickers?c. How would the law affect the demand andequilibrium wage for apple pickers?
