ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 6.13P
To determine
If the given statements as True, false, or uncertain and explanation for each option chosen.
Concept Introduction:
Equilibrium refers to a situation where quantity demanded of the good equals the quantity supplied of the good.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The table below gives the quantity of fancy widgets
demanded and the quantity supplied for selected prices.
(a) Find the linear equation that gives the price as a
function of the quantity demanded.
(b) Find the linear equation that gives the price as a
function of the quantity supplied.
(c) Use these equations to find the market equilibrium
price.
Price
Quantity
($) Demanded (thousands) Supplied (thousands)
40
50
60
70
100
Quantity
270
250
230
210
150
0
160
320
480
960
C
(a) What is the price as a function of the
quantity demanded?
p=0
(Type an expression using q as the variable. Type
your answer in slope-intercept form.)
(b) What is the price as a function of the
quantity supplied?
p=
(Type an expression using q as the variable. Type
your answer in slope-intercept form.)
(c) What is the market equilibrium price?
Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units.
(a) Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.
(i) The equilibrium price
(ii) The equilibrium quantity
(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.
(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.
(d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?
(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.
Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units.(a) Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.(i) The equilibrium price(ii) The equilibrium quantity(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.(d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.
Knowledge Booster
Similar questions
- Assume gasoline is sold in a competitive market, the equilibrium price is $50 per barrel, and the equilibrium quantity is 1000 barrels. (a) Using the numerical values above, draw a correctly labeled graph of the gasoline market and show each of the following. (i) The equilibrium price (ii) The equilibrium quantity (b) At a price of $40 per barrel, will there be a surplus or a shortage in the market? Explain. (c) Assume new oil wells are discovered. On your graph from part (a), show how this change will affect the equilibrium price and quantity in the market for gasoline. (d) Assume instead there is an increase in the price of gasoline-operated automobiles. How will this change affect the market for gasoline? Explain. (e) If both changes in part (c) and part (d) occurred simultaneously, what will happen to the equilibrium price and quantity of gasoline?arrow_forward1. Identify how the following factors affecting demand impacts the given goods/services. (POSITIVE, NEGATIVE, NONE) Provide brief explanation. Convenience food Products purchased on the internet Mobile phones Pay-per - view- television programming Books Airline travel within Us and UK Price of goods and services Income Price of related goods Price expectations Taste No. of consumers Range of available goods 2. Identify how the following factors affecting supply impacts the given goods/services. (POSITIVE, NEGATIVE, NONE) Provide brief explanation. Price of good or service Cost of inputs Price of related goods Technology Expected price of the good in the future No. of sellers Tax Subsidies Availability of inputs Crude oil Hotel rooms Beef Fast food stalls Credit cards from…arrow_forwardquestion 1arrow_forward
- QUESTION 3: Table 3 Price per Cheeseburger $5 7 6849 Quantity Demanded (Cheeseburgers per Month) Quantity Supplied (Cheeseburgers per Month) 1,500 500 1,200 700 900 900 600 1,100 300 1,300 a). Refer to Table 3. This market will be in equilibrium if the price per cheeseburger is A) $5. B) $6. C) $7. D) $8. ANSWER: b). Refer to Table 3. If the price per cheeseburger is $6, the price will A) remain constant because the market is in equilibrium. B) decrease because there is an excess demand in the market. C) increase because there is an excess demand in the market. D) decrease because there is an excess supply in the market. ANSWER: c). Refer to Table 3. If the price per cheeseburger is $9, there is a(n) A) market equilibrium. B) excess demand of 500 units. C) excess demand of 300 units. D) excess supply of 1,000 units. ANSWER:arrow_forwardQuestion 2 Assume that each of the markets below is initially in equilibrium. Then for each market below, suppose that the indicated scenario occurs. Illustrate the effect of each event in a diagram and indicate the effects on the equilibrium price and quantity. a. Market: Airbnbs. Scenario: Hotels provide a discount to customers during the winter. [3 marks] b. Market: Salmon. Scenario: The Ministry of Health warn that consumption of salmon may lead to high cholesterol coupled with an increase in the price of fish bait. [3 marks] c. Market: Tablets. Scenario: Consumers learn that laptops will be much more heavily taxed starting with next year's models. [3 marks] d. Market: Donuts. Scenario: Krispy Kreme opens a franchise in Barbados. [3 marks] e. Market: E-cigarettes Scenario: The government places a tax on e-cigarette producers to discourage smoking coupled with the private sector running ad campaigns on the detrimental effects of smoking [3 marks] Question 3 a. Producers prefer goods…arrow_forwardThe questions in parenthesis are the answer choices. Only 1 can be selected. In each of the following cases, determine how supply or demand shifts and how the equilibrium changes. a. Smartphones: Microchips used in smartphones become less costly to produce. As a result, the (demand for ,supply of, supply of and demand for) smartphones increase(s), causing the equilibrium price to (fall, rise, rise, fall, or remain unchanged) and the equilibrium quantity to (fall, rise, rise, fall, or remain unchanged) b. ALS medical research funds: The ALS ice bucket challenge goes viral, leading to greater awareness of the benefits of and need for ALS research. As a result, the (supply of and demand for, demand for, supply of) ALS research increase(s), causing the equilibrium price (or opportunity cost) of such research to (fall, rise, rise, fall, or remain unchanged) and the equilibrium quantity to (fall, rise, rise, fall, or remain unchanged) .arrow_forward
- Question 1 For each of these situations for part a, b, c, answer what happens to the list below. (increase, decrease, no change) with all other things constant. In addition draw the necessary Demand and Supply graph and show the shifts. Label all points on the graphs clearly. State for each market below what happens to: demand, supply, equilibrium price, equilibrium quantity, Quantity Demanded, Quantity Supplied How will a decrease in supply of Coffee affect the market for Coffee and Tea market? Assume substitute products. You need to show two markets, with two sets of the list. ? How will an increase in cost of plastic used in making toys affect the market for toys? How will the increase' Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardPlease assistarrow_forwardAn increase in supply and a decrease in demand occur in a market. What happens to the equilibrium price and quantity? A.) The equilibrium price decreases; the equilibrium quantity increases. B.) The equilibrium price increases; the equilibrium quantity decreases. C.) The equilibrium price increases; the change in the equilibrium quantity is uncertain. D.) The equilibrium price decreases; the change in the equilibrium quantity is uncertain.arrow_forward
- Question: A survey indicated that chocolate is Americans' favorite ice cream flavor. For each of the following, indicate the possible effects on demand, supply as well as equilibrium price and quantity of chocolate ice cream. a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk-producing cattle in their herds by a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. b. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream. d. New technology for mixing and freezing ice cream lowers manufacturers' costs of producing chocolate ice cream.arrow_forwardplease select the correct answer.1.The relative price of a product can fall when its money grows if: a)consumers want it enough (b) other prices increase at a lower rate (c) other prices increase increase even more (d) other prices decline 2.if there is consumer sovereignty, consumers are able to (a) control the price at which they buy products (b) control the quantity of the products that are offered in the market (c) determine how resources are allocated through their buying decisions (d) for business to lower prices. 3. consumers have benefited from the growth of the internet because (a) it is free. ( b) it provides them with the truth. (c) it gives a wider variety of products from which to chose. (d) it allows them to keep their personal information secret.arrow_forwardThe figure shows a market for oil. Price ($/barrel) 72 64 56 48 40 D 80 84 88 92 Quantity (million barrels) If the current price of oil is $44 per barrel, the quantity of oil demanded is A million barrels, the quantity supplied is A million barrels, and the quantity bought is AA million barrels. There is excess (demand/supply) A in the market, and the price is expected to (rise/fall)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education