PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 5SCQ
In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve?
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Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.
The number of people at the most common ages for home-buying increases.
People gain confidence that the economy is growing and that their jobs are secure.
Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answer.
Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
Imagine you are the owner of a natural gas company. You can either extract as much of the resource as fast as possible or delay extraction until a future time. Projections indicate that the price of natural gas is expected to fall in the future. What would you do in the present?
a. Sell as much natural gas as possible now and less in the future—reflected by a rightward shift of the current supply curve in the future. B. Sell as much natural gas as possible now and less in the future—reflected by a movement down the current supply curve.C. Sell as much natural gas as possible now and less in the future—reflected by a movement up the current supply curve.D. Sell as little natural gas as possible in the present and delay extraction until the future—reflected by a leftward shift of the current supply curve in the future.
Chapter 4 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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- Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans. Because of a threat of a war, people become uncertain about their economic future The overall level of saving in the economy diminishes. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.arrow_forwardHow can an economy adjust back to equilibrium? Is it by having an equal amount of demand and supply?arrow_forwarddo an Internet search of the famous words "irrational exuberance" and read a few articles. Post links to the articles and provide additional input. Here are a couple of questions to guide the discussion: a. What do you think Greenspan meant by the term "irrational exuberance"? b. Are/were the markets irrational?arrow_forward
- How is the buying behavior in business markets impacted by different types of demand? Identify the three types of demand (derived, Inelastic, Fluctuating), illustrate each demand with examples with product pictures, and how they affect buying behavior?arrow_forwardSupply and demand is a very important way to judge how prices are determined in our economy. You will need to focus on a recent price change that you have experienced when going to the grocery store. Identify why the price increased based on the determinant of supply and demand. Analyze the impact of why the price change occurred and explain the challenges that firms will be facing to raise prices on consumers.arrow_forwardDraw a supply and demand graph that represents the labor market. Now, assume that the economy is in a recession and demand for labor is falling. Assume that wages are sticky. What happens to our supply and demand curves? What is the new point of equilibrium? Will the market experience an increase or a decrease in unemployment?arrow_forward
- Should there be laws to restrict the value of houses people buy and the amount of leverage used to buy the house? What is the problem with having such laws in a free market?arrow_forwardHow can the milk industry perform successfully in the future economy?arrow_forwardexplain at least two reasons that, according to economic theory, might prevent business from changing prices more frequently.arrow_forward
- Friedrich von Hayek won the Nobel Prize in Economics in 1974. In awarding the prize, the Academy specifically referred to his conclusion quoting the Academy, not Hayek "that only by far-reaching decentralization in a market system with competition and free price-fixing is it possible to make full use of knowledge and information." What did the Academy mean?arrow_forwardIn a School year 2020, at a University which requires that all students must take Accounts as a core requirement. The University Bookshop made their order for Accounts Textbook based on the number of registered students in the last academic year. Using the list of options of possible impacts, select what is happening in the following markets. Select the impact if any on i.Supply ii.Price iii.Quanityiv.Demandarrow_forwardWhat if a t-shirt company ramped up production until there was a huge supply? What positive and negative effects would this have?arrow_forward
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