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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4
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.
1. When price increases __________________ increases. 2.When price increases __________________decreases. 3. The height of the supply curve represents the ____________________ for each quantity. 4. The height of the demand curve represents the __________________ for each quantity. 5. What must be given up to produce one additional unit is called the..... Options: supply marginal value total cost quantity supplied quantity demanded marginal cost demand total value
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
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
Answer True/False 1.A change in the price of a good will cause a shift in its demand curve. 2.An increase in consumers’ incomes will cause an expansion in the demand of all goods. 3.The price charged for a good is the equilibrium price. 4.An inferior good is one that has been badly produced. 5.Mad cow disease led to an increase in the price of pork.
Exhibit 3-1 Is 01 250 350 150 Quantity 96 2. Price (dollars)
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.
1. When demand for a good shifts outward (and supply remains fixed), what happens in equilibrium? A. price increase; quantity sold increases B. price decrease; quantity sold increases C. price increase; quantity sold decreases D. price decrease; quantity sold decreases
1. Explain and illustrate what's going to happen in the market equilibrium of: a. Holiday abroad when there is a discount offered by domestic hotels. b. Corn when a large number of consumers becoming vegetarians. 2. Explain why the quantity demanded of meat will increase when there is fall in price of meat.
3) Coca-Cola: Suppose that Pepsi decreases the price of its six-packs from $3.00 to $2.50. How would this news change the demand for six-packs of Coca-Cola? a. First, graph the situation with price of Coca-Cola and quantity of Coca-Cola. Use BLACK for supply, BLUE for demand. Label supply as Sı and demand as Dj and D2. b. Using your knowledge of the laws of supply and demand, explain the shift(s) that have been made in your graph and describe what happened to the equilibrium price and quantity (3-4 bullet points), Make sure to include the 8 determinants of demand or 5 determinants of supply. Label the equilibrium points CLEARLY! c. Add a picture of Coca-Cola vs. Pepsi.
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