EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 1, Problem 6RQ
To determine
To analyze whether the theory of people buying less due to increase in price is incorrect.
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Demand and the price of motor fuel From 2007 to 2008, the price of gasoline in the United States rose from $2.76 per gallon to $3.20 per gallon. The quantity used decreased from 3,389 million barrels to 3,290 million barrels. In 2009, the price fell to $2.30 per gallon, yet the quantity used continued to decline, to 3,283 million barrels. After-tax personal income increased from 2007 to 2008, but it fell from 2008 to 2009. Which one or more of the following hypotheses do you think best explain(s) the pattern of gasoline sales? Illustrate your chosen hypothesis with an appropriate diagram.
a. In 2008, the demand curve for gasoline had the usual negative slope. However, in 2009, the demand curve shifted to a positively sloped position.
b. The demand curve had a negative slope at all times, but because gasoline is a normal good, the demand curve shifted to the right in 2008 and then to the left in 2009
How would [1] a decrease in the price of flour and [2] an improvement in technology of pizza
making would affect the market price and quantity of pizza, other things remaining constant?
The price of pizza would drop and the equilibrium quantity would rise.
The price of pizza would drop but the impact on the equilibrium quantity is uncertain.
The equilibrium quantity of pizza would rise but the impact on price is uncertain.
Both the price as well as the equilibrium quantity of pizza would rise.
Now suppose that a political crisis in the Middle East lead to a decrease in the supply of petrol by 8 liter per day at every price. Show the change in the graph paper and show the new equilibrium position. What is the new equilibrium price of petrol, what is the new equilibrium quantity of petrol?
Price (RM)
Quantity demanded (liter per day)
Quantity supplied (liter per day)
0.80
8
24
0.75
10
22
0.70
12
20
0.65
14
18
0.60
16
16
0.55
18
14
Table 1
Chapter 1 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 1.2 - Prob. 1MQCh. 1.2 - Prob. 2MQCh. 1.3 - Prob. 1TTACh. 1.3 - Prob. 2TTACh. 1.4 - Prob. 1TTACh. 1.4 - Prob. 2TTACh. 1.4 - Prob. 1MQCh. 1.4 - Prob. 2MQCh. 1.4 - Prob. 1.1MQCh. 1.4 - Prob. 1.2MQ
Ch. 1.5 - Prob. 1TTACh. 1.5 - Prob. 2TTACh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQCh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3PCh. 1 - Prob. 1.4PCh. 1 - Prob. 1.5PCh. 1 - Prob. 1.6PCh. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10P
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