Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 22, Problem 2DQ
To determine
The relation between fixed cost of production and inelastic supply of agricultural product.
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a.
b.
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Price
Supply 1
$4.00
60
4.25
70
4.50
80
4.75
90
(5.00
100
5.25
110
5.50
120
What are equilibrium price and quantity?
Supply increases by 50% - what are the new equilibrium
price and quantity?
Demand
140
130
120
110
100
90
80
2014 McGraw-Hill Ryerson Limited
Supply 2
LO6
2-45
What is the deadweight loss resulting in a $10 price ceiling on this
market?
50
Supply
45
40
35
30
20
15
10
Demand
O 10 20
30 40 50 60 70 80 90 100
Quantity of Cement (Bags)
| 20 bags of cement
O $150
O 40 bags of cement
$0
) There will be no deadweight loss since consumers are getting
cheaper products
O none of these answers are accurate
$250
O $100
Price per bag ($)
QUESTION 10
10. Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10% by volume), and that ethanol manufactured in the U.S. is made from corn, what will happen if
scientists develop a new genetically engineered bacteria that can efficiently convert high cellulose biomass (grasses, wood chips, etc.) into ethanol?
O a) Demand for ethanol will increase
O b) Demand for ethanol will decrease
O c) Supply of ethanol will increase
O d) Supply of ethanol will decrease
Oe) Both (a) and (c)
Chapter 22 Solutions
Microeconomics
Ch. 22 - Prob. 1DQCh. 22 - Prob. 2DQCh. 22 - Prob. 3DQCh. 22 - Prob. 4DQCh. 22 - Prob. 5DQCh. 22 - Prob. 6DQCh. 22 - Prob. 7DQCh. 22 - Prob. 8DQCh. 22 - Prob. 9DQCh. 22 - Prob. 10DQ
Ch. 22 - Prob. 11DQCh. 22 - Prob. 12DQCh. 22 - Prob. 13DQCh. 22 - Prob. 14DQCh. 22 - Prob. 1RQCh. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - Prob. 5RQCh. 22 - Suppose that corn currently costs 4 per bushel and...Ch. 22 - Suppose chat both wheat and corn have an income...Ch. 22 - Prob. 3PCh. 22 - Prob. 4P
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- The figure belov WS suppl i demand curves for bread. Spplyginal con 35 30 25 00 O 1 00 2000 1000 4000 so00 4000 7.000 LO00 R000 10000 Quantity of loaves Q You will not be given credit unless you provide a detailed explanation for the following questions! a) What are the equilibrium price and the equilibrium quantity in the bread market? How can you tell? Is there excess supply or excess demand in the bread market when the price of bread is 2.5 euros? Why? Explain how price, quantity demanded and quantity supplied will adjust to reach equilibrium when the price is b) 2.5 euros. Initially, the bread market is in equilibrium. Suppose that there is technological improvement in the production process of bread. Explain how supply and demand curves, equilibrium price and equilibrium quantity change as result.arrow_forward3. Refer to the expanded table below from review question 8. LO3.4 a. What is the equilibrium price? At what price is there nei- ther a shortage nor a surplus? Fill in the surplus-shortage column and use it to confirm your answers. b. Graph the demand for wheat and the supply of wheat. Be sure to label the axes of your graph correctly. Label equi- librium price Pand equilibrium quantity Q. c. How big is the surplus or shortage at $3.40? At $4.90? How big a surplus or shortage results if the price is 60 cents higher than the equilibrium price? 30 cents lower than the equilibrium price? Thousands of Bushels Surplus (+) or Shortage (-) Thousands Price per Bushel of Bushels Supplied Demanded 85 $3.40 72 80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81arrow_forwardSuppose a demand curve has a vertical intercept of (0,80). Suppose a supply curve has a vertical intercept of (0,0). The equilibrium price is $30 and the dollars. equilibrium quantity is 40. The total surplus is O 800 O 1600 O 2400 O 3200arrow_forward
- A company was selling its product at a price of $8 a unit, and sold 18 units. Then they raised the price to $11 and sold 14 units. In this case, the lost revenue due to the quantity effect is _________ and the new revenue due to the price effect is $36.5; $44 O $36.5; $42 O $32; $42 $32; $44arrow_forward4. How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate be- cause they depend on the magnitudes of the shifts? Use sup- ply and demand to verify your answers. LO3.5 a. Supply decreases and demand is constant. b. Demand decreases and supply is constant. c. Supply increases and demand is constant. d. Demand increases and supply increases. e. Demand increases and supply is constant. f. Supply increases and demand decreases.arrow_forwardThe graph below shows the market for ground coffee in Moncton. Price per kilo 28 24 20 16 12 0 200 400 600 800 1000 2001 4001 6001 8002000 Kilos per day O 0 a) What would be the new equilibrium price if both the demand and supply of ground coffee increased by 400 kilos per day? $ b) What would be the new equilibrium price if both the demand and supply of ground coffee decreased by 400 kilos per day?arrow_forward
- The graph shows the market for tutoring at a university. Price (per hour of tutoring) $25 20 15 10 7.50 LO 5 2.50 S D 100 200 300 400 500 600 700 800 900 Quantity (hours of tutoring per week) If there is a price floor of $15, consumer surplus is, in numerals, $.arrow_forwardPRICE 20 18 16 14 12 10 Demand 1 6 4 25 units. O27 units. Consumer 1 9 units. 2 units. 2460 10 12 14 16 18 20 QUANTITY PRICE 27 24 21 718 15 12 9 6 Refer to Figure 4-2. If these are the only two consumers in the market, then the market quantity demanded at a price of $3 is Consumer 2 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITYarrow_forwardSuppose that the incomes of buyers in a particular market for an inferior good increase and there is also an increase in input prices. What would we expect to occur in this market? Select one: O a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. O b. The equilibrium price would decrease;but the impact on the amount sold in the market would be ambiguous. out Oc Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. O d. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguousarrow_forward
- -2 The graph below shows the rice market in Hatha. Price 10 6 8 7 6 LO 3 2 1 200 400 600 800 Quantity of kilos per month 1000 S D Earrow_forwardSuppose that a major luxury car producer exits the market in order to produce more economy cars. At the same time, a market research group reports that the average price of a luxury car is increasing, and the number of luxury cars sold is increasing. What must be happening to supply and demand. O The supply curve shifts to the left, and the demand curve shifts to the left. O The supply curve shifts to the left, and the demand curve shifts to the right. O Only the supply curve shifts to the left. O Only the supply curve shifts to the right.arrow_forward27) Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the price of a substitute for a good? Figure 2 P" P FE Q*Q® Q Qº Figure 3 Figure 4 S P₁ P P₁ p. P Figure 1 Q" Q Figure 2.2 A) Figure 1 B) Figure 2 C) Figure 3 D) Figure 4 18 Q't lö 27)arrow_forward
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