Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 19, Problem 11E
What does the following mean: “Nothing in life is free”? Illustrate this point. (Do not use a
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Discuss how prices are determined in a market economy. Find a good/service for which the price has recently changed and try to provide an explanation as to why the price changed the way it did using the concepts of supply and demand. That is, if the price of that good/service increased (or decreased), explain why.
Explain how the price of a good (fertilizer) is determined
Scenario: When the price of butter decreased by 10%, the quantity that consumers demanded increased by 13%. (Write the equation)
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- Explain why the following statement is false: “In the goods market, no buyer would be willing to pay more than the equilibrium price.” 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?arrow_forwardWhen you go to the store to buy some M&Ms candy, you find they are LESS expensive than they were last month. Which of the following could explain why M&Ms are LESS expensive? Select one: a. Consumers have switched to buying other types of chocolate. b. A new study finds that the benefits of eating chocolate are enormous. c. The supply of cacao beans, used to produce chocolate, has decreased around the world. d. A new robot has been installed at the Mars chocolate company which actually increases the time needed to produce M&Ms.arrow_forwardGraphically show how each of the following shifts the supply curve. Also identify which factor of supply is being affected in each case. a) You are an Oil seller. You hear that after 2 months, the price of Oil will go down. How will it affect your current supply of Oil? b) Beef and Leather are complements in production. If the price of Beef increases, how will it affect the supply of Leather? c) If the price of Potatoes increases, how does it affect the supply of French Fries?arrow_forward
- Draw a supply and demand curve in which you label price axis, quantity axis, supply curve, demand curve, and equilibrium point. Upload your photo as an image to the discussion forum. Add a brief discussion about what the equilibrium point in economics means.arrow_forwardHow can we apply the supply and demand analysis to a competitive market? What is a real-life example of an increase in the number of consumers in the market or an increase in the number of sellers/buyers in the market (competitive market)?arrow_forwardWhat refers to the quantity of goods and services that consumers are willing to buy at a given price? refers to the quantity of goods and services that consumers are willing to buy at a given price.arrow_forward
- 9 3. What is wrong with the statement: “If the market price of good Z rose to $100,000, then no one could afford to buy it”? Use a graph to answer. please explain your answer. Also, use economic terms and not mathematics. thank you.arrow_forwardThe demand curve shifts to the right by more than the supply curve shifts to the right. In this case, the price of marijuana will rise. ( Try to visualize the demand curve shifting to the right by more than the supply curve shifting to the right. Can you see the higher price on the vertical axis?)arrow_forwardUsing the 3 step method, determine what happens in the market for orange juice, if the price of apple juice drops? (Assume apple juice is a substitute for orange juice.) Steps: 1? 2? 3?arrow_forward
- Question 4 4.1. It is important to differentiate between a change in quantity demanded versus a change in demand. Using a diagram, illustrate and explain an increase in the price of the product. Clearly state whether a price increase will cause a change in quantity demanded or a change in demand. 4.2. Equilibrium is the condition in the market system when the quantity demanded is equal to the quantity supplied. Given the definition of equilibrium, answer the following questions: 4.2.1. Calculate the equilibrium quantity and price if the quantity supplied can be represented by the equation Qs = 18 000 + 0.2P and the quantity demanded can be represented by the equation Qd = 2 400 – 0.1P. [Tip: Solve the value of P first and then substitute this P-value in the calculation of the Q-value.] 4.2.2. Based on your answer in 4.2.1, draw a graph to illustrate market equilibrium. Clearly indicate equilibrium quantity and price.arrow_forwardWhich of the following describes the statement "A fall in the supply of petrol will lead to an increase in its price"? a. Positive statement b. Negative statement c. Opinion statement d. Normative statementarrow_forward
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