4. Celery leaves and basil are substitutes in making chicken noodle soups. A drought destroyed agood portion of local basil supply, ceteris paribus, we haveA. the price of both celery and basil will fall.B. the price of both celery and basil will increase.C. the price of celery will increase, and the price of basil will fall.D. the price of celery will fall, and the price of basil will increase.

The objective of the question is to understand the impact of a change in the supply of one good on…

Answered: 4. Celery leaves and basil are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What happened to the equilibrium price and quantity of Chick-fil-A when Popeye's released their chicken sandwich? A. Price decrease, Quantity decrease B. Price decrease, Quantity increase C. Price increase, Quantity decrease D. Price increase, Quantity increase
1. What will happen in the market for wine if the price of cheese increases (wine and cheese are complements)? 2. What will happen in the market for brewed coffee if the price of coffee beans increases? 3. What will happen in the market for lobster if the government rises the income tax and lobsters are a normal good? 4. What will happen in the market for tomatoes if a new study is released that shows that pesticides used on tomatoes contain cancer forming agents. 5. A fall in airfares from UK has raised the demand for hotels rooms in St. Vincent. 6. Government grants a $1 subsidy on each bottle of milk produced. 7. Government collects a $2 sales tax on each bottle of rum.
6. Beer and Wine are substitutes, favorable weather in California has produced a good harvest grapes (used to produce wine ) What impact does this have on the equilibrium price and quantity? a. Price increases, quantity decreases b. Price decreases, quantity decreases c. Price decreases, and quantity Is ambiguous d. Price is ambiguous, and quantity decreases
2.The price of food increased during the past year. a.Explain why the law of demand applies to food just as it does to all other goods and services.
Show in a diagram the effect on the demand curve, the supply curve, the equilibriumprice, and the equilibrium quantity of each of the following scenarios.c. The market for blueberry muffinsi. Scenario 1: More people become health conscious and realize the highsugar content of muffins. ii. Scenario 2: The price of blueberries has increased
If soup is an inferior good and income rises, then: a. the equilibrium price of soup and the equilibrium quantity of soup will both rise. b. the equilibrium price of soup will rise and the equilibrium quantity of soup will fall. c. the equilibrium price of soup and the equilibrium quantity of soup will both fall. d. the equilibrium price of soup will fall and the equilibrium quantity of soup will rise.
25. Suppose the price of insulin injection kits rose from $72 to $98 but the equilibrium quantity remained the same. What pattern of changes could explain that? a. demand increased and supply increased b. demand decreased and supply increased c. demand increased and supply decreased d. demand decreased and supply decreased e. none of the above
11. An increase in the price of petrol above the equilibrium will. a. Shift the petrol supply curve to the right. b. Shift the petrol demand curve to the right. c. Cause a surplus of petrol. d. Cause a shortage of petrol.
II. The Law of Supplya. In wordsThe Law of Supply states that quantity (demanded/supplied) goes (down/up) as theprice goes (down/up), all other things (equal/moving).Hence, the relationship between quantity demanded and price is (direct/inverse).
21. The price of chicken increases as the result of higher beef prices. This indicates that a chicken and beef are substitutes b. chicken and beef are complements c the market demand for beef is inelastic. d. the market demand for chicken is elastic.
6. What is true of both an increase in demand and an increase in quantity demanded? a. They both involve a shift of the demand curve to the right. b. They are impacted by a change in the price of the good. c. They both involve a change in the willingness or ability to buy. d. They both involve a movement down along a fixed demand curve.

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