Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 5, Problem 6P
To determine
The impact on market for the movies, if the city council imposes a
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If a city government were to impose a ceiling price on rental prices in the downtown area:
quantity supplied would increase.
supply would increase.
an illegal market would likely emerge.
quantity demanded would decrease.
What will be the result of an decrease in a price ceiling for gasoline?
Group of answer choices
The quantity will decrease because the quantity demanded will decrease.
The quantity will remain the same; only the price will change.
The quantity will increase because the quantity demanded will increase.
The quantity will decrease because the quantity supplied will decrease.
Beachfront resorts have an inelastic supply, and automobiles have an elastic supply. Suppose that a rise in population doubles the demand for both products (that is, the quantity demanded at each price is twice what it was).
What happens to the equilibrium price and quantity in each market?
Which product experiences a larger change in price?
Chapter 5 Solutions
Exploring Macroeconomics
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- For a given market, the equilibrium quantity of the good or service will decrease if demand decreases and supply decreases demand increases and supply decreases demand decreases and supply increases demand increases and supply increasesarrow_forwardThe demand and supply schedules for gatorade is as follows: Price (Gallons) Quantity Supplied $90 888888 80 70 60 50 40 Quantity Demanded 20 88888 25 30 35 40 55 65 339*** 55 45 35 25 15 What is the equilibrium price of gatorade? What is the equilibrium quantity? The city of Fayetteville is worried about the effectiveness of gatorade in thirst quenching young adults. They set a price floor $20 above equilibrium. How much gatorade is sold? in? Thirsty young adults seekers protest to the decision so the city imposes a price calling $10 lower than the price floor from the previous question. How much gatorade is sold? What effect does this resultarrow_forwardUse the data and graph below to complete the following. Plot the data points onto the graph. Use all necessary labels. Suppose Miley Cyrus only charges $60 per ticket. Draw this price ceiling on the graph What is the equilibrium price and quantity in this market? Price:# # $# Quantity: If the price Miley Cyrus charges for each ticket is below equilibrium, why doesn’t she raise her prices?arrow_forward
- Answer all four:Use the data below to answer the following questions: Price Quantity Supplied $4 4 $7 13 Calculate the price elasticity of supply when the price rises from $4 to $7. Round your answer to the nearest hundredth. Is the price elasticity of supply elastic or inelastic? The government wants to increase production of this good. Would it make more sense to offer a subsidy or a tax? Based on your previous answers, would the government plan to increase production be likely to be effective or ineffective? Explain your answer.arrow_forwardThe graph below represents the supply of Good X. The numbers on the chart show the percent changes in price and quantity moving along the supply curve. The numbers below the horizontal lines indicate the percent change in quantity, while the numbers to the right of the vertical lines indicate the percent change in price. Which portion of the supply curve for Good A is unitary elastic? Select the correct answer below: Point A to Point B Point B to Point C Point C to Point D Point D to Point Earrow_forwardThe demand and supply curves for beach volleyballs are given by: D = 80-4P S = -2+2P The current price is 19. How much is the excess supply or demand? Write a positive number if you find an excess supply, and write a negative number if you find an excess demand. (round your answer to one decimal place)arrow_forward
- The U.S. government has subsidized ethanol production since 1978. With the advent of affordable electric cars, policymakers are considering whether to allow the subsidy to expire. The accompanying graph represents the market for ethanol. Move the supply and/or demand curves to show how reducing the subsidy will affect the ethanol market. Equilibrium price? may increase or decrease, but it is impossible to know for sure. decreases. remains constant. increases.arrow_forwardA binding price ceiling is imposed in the market for aspirin. At the ceiling price: a) the quantity supplied of aspirin exceeds the quantity demanded. b) the quantity demanded of aspirin equals the quantity supplied. c) the quantity demanded of aspirin exceeds the quantity supplied. d) the quantity demanded of aspirin will be artificially restricted by the price ceiling.arrow_forwardUse the graph below to answer the following questions: Price $15 Supply $14 $13 $12 $11 $10 Demand 25 75 125 175 225 275 Quantityarrow_forward
- Question 12.12. A surplus of a product will arise when price is above equilibrium with the result that quantity demanded exceeds quantity supplied. above equilibrium with the result that quantity supplied exceeds quantity demanded. below equilibrium with the result that quantity demanded exceeds quantity supplied. below equilibrium with the result that quantity supplied exceeds quantity demanded.arrow_forwardIn Figure 1, suppose the marginal value for gasoline falls by $6 for every quantity demanded for all gas stations in the market. After the changes, assume that the government enacts a price ceiling of $2. What will happen in the market? A) Quantity supplied will equal quantity demanded.B) There will be a surplus of 1 gallon.C) There will be a shortage of 3 gallons.D) There will be a surplus of 2 gallons.E) There will be a shortage of 4 gallons.arrow_forwardA company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company’s anticipated demand over the lifetime of the bridge: If the government were to build the bridge, what price should it charge?arrow_forward
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