Economics For Today
9th Edition
ISBN: 9781305507074
Author: Tucker, Irvin B.
Publisher: Cengage Learning,
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Concept explainers
Question
Chapter 4, Problem 19SQ
To determine
Describe the shift of supply and its effects in equilibrium.
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Students have asked these similar questions
If there is an increase in supply for a product, how will market equilibrium be
restored?
As the product's price decreases, the quantity demanded increases until a
new equilibrium is gained.
As the product's price increases, the quantity demanded decreases until a
new equilibrium is gained
As the product's price increases, the quantity demanded increases until a new
equilibrium is gained.
As the product's price decreases, the quantity demanded decreases until a
new equilibrium is gained.
Supply and Demand - End of Chapter Problem
Two students are debating the effects of an expected decline in future home prices. Student 1 claims that a decline in home prices
will increase the total quantity of homes bought and sold while student 2 claims that the quantity of homes bought and sold will
decline.
a. Which student is correct?
Without knowing the magnitude of the shifts, we
cannot tell whether equilibrium quantity increases or
decreases.
No one is correct.
Student 2 is correct.
Student 1 is correct.
b. What do we know will happen without ambiguity?
Supply will decrease once expectations are
announced.
Demand will increase once expectations are
announced.
Equilibrium price will decrease.
Equilibrium quantity will increase.
Price
si
S2
C
D2
D1
Quantity
Which of the following would result in equilibrium
shifting from point C to point A?
Chapter 4 Solutions
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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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Consider the market shown in equilibrium at point A in the graph to the right. Suppose the market experiences the following shock: A technological improvement 1.) Use the line drawing tool to show the result of the market shock. Properly label this line. 2.) Use the point drawing tool to indicate the new equilibrium price and quantity. Label this new point 'B'. Carefully follow the instructions above, and only draw the required objects. Market Price A Quantity Darrow_forwardWhich one of the following statements is correct?A. We cannot analyse demand without using the ceteris paribus assumption.B. Ceteris paribus means that all possible changes are taken into account.C. With the ceteris paribus assumption we can allow at least three changes to occur simultaneously.D. With the ceteris paribus assumption everything is changing at the same time.E. The ceteris paribus assumption applies to demand schedules but not to demand curves.arrow_forwardX is an inferior good. If there is an increase in incomes, then (quantity supplied,quantity demanded, supply, demand) for good X will (increase, decrease). This will cause the equilibrium price to (increase, decrease) and quantity to (increase, decrease). If a new type of fertilizer is invented that makes coconut trees twice as productive, the (quantity supplied, quantity demanded, supply, demand) for coconuts will (increase, decrease). This will cause the price to (increase, decrease) and quantity to (increase, decrease).arrow_forward
- Price A D B 100 D1 S1 D2 S2 Quantityarrow_forwardWhat is wrong with this statement? Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period.arrow_forwardA warm, dry summer means that the English pear harvest is exceptionally good. At the same time, a new diet in which pears have an important role becomes fashionable. Which of the following do we expect to happen in the market for pears? a) Demand curve shifts left, supply curve shifts right, and price decreases. b) Demand curve shifts right, supply curve shifts right, and quantity traded increases. c) Demand curve shifts right, supply curve shifts left, and price increases. d) Demand curve shifts left, supply curve shifts down, and quantity traded decreases.arrow_forward
- Question 34 Assume the changes represented by panels (a) and (c) both happen at the same time. The resulting equilibrium will have Group of answer choices higher price and higher quantity. higher price, but quantity is indeterminate (could be higher or lower) higher quantity, but price will be indeterminate (could be higher or lower) lower price and higher quantityarrow_forwardIf the number of buyers in a market increases from 25 to 75, you would expect the equilibrium price to _____ and the equilibrium quantity to _____, holding all else constant. Group of answer choices remain the same; remain the same decrease; decrease decrease; increase increase; increase increase; decreasearrow_forwardAccording to the figure, what combination would have caused equilibrium to move from point A to point E? 70 60 50 28 Price (S) 40 40 30 20 10 10 <α 0 5 10 15. Quantity a shift in supply to the left and a shift in demand to the left a shift in supply to the right and a shift in demand to the left a shift in demand to the right and a shift in supply to the left a shift in supply to the right and a shift in demand to the right.arrow_forward
- a) decrease in demand. Price b) increase in quantity demanded. c) increase in demand. E Refer to Figure 4-2. A change from Point A to Point B represents a(n): d) decrease in quantity demanded. B A с D₂ Quantity D Do AD₁arrow_forward2) A decrease in production costs of good X led to higher equilibrium quantity and higher price of good X. Which of the following describes good X? If you believe there are several correct answers, chose the one that provides the most precise (narrowest) description of X. A) X is an Abrasive good B) X is a Barber good C) X is a Curtius good D) X is a Dremen good E) X is an Elapsed good F) X is a Friedman good G) X is a Giffen good H) X is Hash good I) X is a normal good J) X is a sub-normal good K) X is an inferior good L) X is a superior good M) The scenario described in this question is impossible if all agents make rational decisions N) None of the abovearrow_forwardPrice £/unit E D3 D1 D2 Quantity Figure 4 Supply and demand curves for a normal good Figure 4 shows a supply (S,) and demand curve (D1) for a normal good – illustrated by the continuous lines. Both curves may shift left or right depending on the situation described below, as illustrated by the dotted and dashed lines. The market is initially in equilibrium at point E given by the intersection of the supply curve S, and demand curve D1. Consider the situation below and select the letter that corresponds to the new point of equilibrium that would arise in the market from the list provided. • Amajor natural disaster disrupts productionarrow_forward
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