Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 4, Problem 15SQ
To determine
The change that will cause a reduction in the surplus of wheat.
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Which of the following causes for an increase in the supply of a product?
a.
An increase in the rate of tax
b.
An increase in the cost of production
c.
An increase in subsidy
d.
A decrease in the number of sellers
1. The table below shows the quantity demanded and quantity supplied of wheat at various prices. Price Quantity Demanded Quantity Supplied0.5 90 301 80 501.5 70 702 60 902.5 50 110
a) What is the equilibrium price and quantity in this market? How can you tell?
b) If the price in the market is $0.5, is there an excess demand or an excess supply? How large is the excess demand or excess supply? Show all your work. Show this situation on a graph.
If the market price is above the equilibrium price:
A. A shortage will occur and producers will produce more and lower prices
B. A surplus will occur and producers will produce less and lower prices
C. A surplus will result and consumers will bid prices up
D. Producers will make extremely high profits
Chapter 4 Solutions
Micro Economics For Today
Ch. 4.2 - Prob. 1YTECh. 4.2 - Prob. 2YTECh. 4.2 - Prob. 3YTECh. 4.2 - Prob. 4YTECh. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQP
Ch. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQPCh. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 16SQCh. 4 - Prob. 17SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQCh. 4 - Prob. 20SQ
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Similar questions
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- The market for bell peppers is perfectly competitive and currently has an equilibrium price of $3 and the number of bell peppers traded is 6. Suppose the government imposes a price floor of $1 on this market. What will be the size of the shortage in this market? Type your answer... Previous Nextarrow_forwardQUESTION 4 Use the following supply and demand schedules for skate boards in table 18.1, to answer the questions 18(a). to 18(d) below. Table 18.1 Price ($) 300 Quantity Demanded Quantity Supplied 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response, to lobbying by the skate board association, the government places a price ceiling at the price of $700 on skate boards. What will this have on the market for skate boards? Explain your answer. b. In response, to lobbying by the skate board association, the government places a price ceiling of $400 on skate boards. Use the information provided in Table 18.1, to plot the supply and demand curve for skate boards. c. Use the information provided in Table 18.1, to plot the price ceiling of $400 on skateboards. d. What will be the result of a price ceiling of $400 on skate boards?arrow_forwardPrice of Gasoline P3 P₂ P₁ 0 9₂ 9₂ 52 D S₁ Price Ceiling Quantity of Gasoline Refer to the figure above. With a price ceiling present in this market, what will happen when the supply curve for gasoline shifts from S₁ to S₂? The market price will stay at P₁ due to the price ceiling. A shortage will occur at the price ceiling of P2. The price will increase to P3. A surplus will occur at the new market price of P₂.arrow_forward
- jarrow_forwardA). Draw the supply and demand curves for the market of specific good. B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected by that decision. C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected by that decision.arrow_forwardSuppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as follows: a. Thousands of bushels demanded 85 80 75 70 65 60 Price per bushel $3.40 3.70 4.00 4.30 4.60 4.90 Thousand of bushels Supplied 72 73 75 77 79 81 Surplus (+) or shortage (-) What will be the market or equilibrium price? What is the equilibrium quantity? Using the surplus-shortage column, explain why your answers are correct. b. Graph the demand for wheat and the supply of wheat. Be sure to label the axes of your graph correctly. Label equilibrium price "P" and the equilibrium quantity "Q." c. Why will $3.40 not be the equilibrium price in this market? Why not $4.90? "Surpluses drive prices up; shortages drive them down." Do you agree? d Now suppose that the government establishes a ceiling price of, say, $3.70 for wheat. Explain carefully the effects of this ceiling price. Demonstrate your answer graphically. What might prompt the government to establish a ceiling…arrow_forward
- Problem 1 The total demand for books and the total supply of books per month in Country A book market are as follows: Price of book $55 60 65 70 75 80 85 90 95 100 105 110 Quantity of Quantity of books books demanded supplied 0 1 3 3 6 9 10 18 22 50 35 25 17 14 12 10 8 6 4 2 0 31 37 42 Surplus (+) or shortage (--) a. Calculate shortages and surpluses and fill in the table b. Construct the graph. c. Explain the situation on the market when price is $70. Show on the graph and calculate d. Explain the situation on the market when price is $105. Show on the graph and calculate ||arrow_forwardAn effective price ceiling: A. Increases the quantity supplied. B. Is set above the equilibrium price. C. Results in a surplus. D. Is set below the equilibrium price.arrow_forwardIn a competitive market, if the government imposes a price ceiling below the equilibrium price, what is likely to happen?A. Surplus of goods B. Shortage of goods C. No change in quantity exchangedD. Price remains the samearrow_forward
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