EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 1.4, Problem 1.2MQ
To determine
The reason why price change doesn’t shift the demand and supply curve and show the impact on the price change if all the factors identified previously did not change.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. This is particularly true when consumers can find these goods in close proximity to each other. For example, prices are often the same at gas stations that are on opposite sides of the street. Prices are also generally the same for products next to each other on the same grocery store shelf.
Choose the correct fill in the blank.
The aforementioned examples are goods that are likely to be
substitutes or complements
You would expect the value of the cross-price elasticity to be
insignificant, small, or large because the opportunity cost of getting information on price is low.
The owner of Grand Central Bookstore is looking into the sales of its Health & Fitness magazine section. She finds that her equilibrium is at 800 magazines per month sold at an average price of $4.75 per magazine. When the price of these Health & Fitness magazines rose to $5.00 each, the quantity sold fell to 725 magazines per month, while the quantity supplied to her increased to 900 a month. From the scenario described, answer the questions below.
Draw an appropriate graph for Grand Central’s Bookstore’s to illustrate this change in the Health & Fitness magazines market position when the price rises to $5.00.
Calculate the price elasticity of demand for the Health & Fitness magazines between prices $4.75 and $5.00. Is it elastic or inelastic? How do you know?
Calculate the price elasticity of supply for the Health & Fitness magazines between prices $4.75 and $5.00. Is it elastic or inelastic? How do you know based on your answer?
The owner also noticed that…
Tom had an "absolute need" for web help and therefore was ready to "pay anything" to get it. If this were true, what shape would his demand curve have? Why isn't this realistic?
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
Knowledge Booster
Similar questions
- Recent research confirms that the demand for cigarettes is not only inelastic, but it also indicates that smokers with incomes in the lower half of all incomes respond to a given price increase by reducing their purchases by amounts that are more than four times as large as the purchase reductions made by smokers in the upper half of all incomes. How can the income and substitution effects of a price change help explain this finding?arrow_forwardWhen the price of a certain product was considered to be "low", consumers spent $5 million monthly on it. After the price doubled, the total consumer expenditures increased to $7 million. Recently you read that this means that the demand curve for this product is upward sloping. Do you agree? Explain.arrow_forward(2) Graph the following given these two goods and their respective prices: books (units with per week) at price Ph=1; and food (units per week) at price Pƒ= 2: (a) Point A (market basket A) that maximizes satisfaction of a consumer. (b) Point B (market basket B) that is affordable but satisfaction is not maximized. (c) Point C (market basket C) that gives a higher level of satisfaction but not affordable.arrow_forward
- what problem could arise with consumers' net demand functions as any price becomes zero? what axiom of consumer theory is involved here? how might it be changed to exclude this possibility?arrow_forwardEconomist George Stigler once wrote that, according to consumer theory, “if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises.” What kind of commodity was Stigler referring to? A normal good An inferior good When the price of this commodity rises, the substitution effect is (positive / negative) and the income effect is (positive / negative). So the net result for consumption of this commodity (depends on which effect dominates / is a decrease / is an increase).arrow_forwardThe following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $120. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and blue (circle symbols) for Carlos. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $120. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) Based on the information on the previous graph, you can tell that____will buy tablets at the given market price, and total consumer surplus in this market will be___ Suppose the market price of a tablet decreases…arrow_forward
- Suppose utility can be measured by "utils" and that Jane is consuming both lemons and cookies. The marginal utility from the last lemon consumed was 8 utils whereas the marginal utility from the last cookie consumed was 16 utils. Is it possible that Jane is maximizing total utility given the current combination of lemons and cookies consumed? Describe in detail what relationship would have to hold between the prices of lemons and cookies in order for Jane to be currently maximizing total utility.arrow_forwardWhich of the following influences people's buying plans and varies moving along a demand curve?A) preferences .B) the price of the good C) income D) the prices of related goodsarrow_forwardProduct M has a price of $7.95. If the Total Utility an individual receives from consuming 8 units of Product M is 249 and the Total Utility for consuming one fewer unit of Product M is 228, then what is the Marginal Utility per Price of the 8th unit of Product M? (Round your answer to 2 digits after the decimal.)arrow_forward
- Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of a pizza, and Pb is the price of a burrito. What is the slope of this demand function, and what information does the slope provide?..arrow_forwardRecent research confirms that the demand for cigarettes is not only price inelastic, but it also indicates smokers with incomes in the lower half of all incomes respond to a given price increase by reducing their purchases by amounts that are more than four times as large as the purchase reductions made by smokers in the upper half of all incomes. How can the income and substitution effects of a price change help explain this?arrow_forwardIs it reasonable to assume that people seek to equate the marginal utility/price ratios of the goods that they purchase, if they have never heard of ‘utility’, let alone ‘marginal utility’, and marginal utility cannot be measured in any absolute way?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning