Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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Question
Chapter 6, Problem 2TY
To determine
(a)
Shift in
To determine
(b)
Shifts in demand curve for automobiles, when airplane fares double.
To determine
(c)
Shifts in demand curve for automobiles, when gasoline prices double.
To determine
(d)
Shift in demand curve for electricity, when average temperature in the US rises.
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Students have asked these similar questions
Now suppose that a political crisis in the Middle East lead to a decrease in the supply of petrol by 8 liter per day at every price. Show the change in the graph paper and show the new equilibrium position. What is the new equilibrium price of petrol, what is the new equilibrium quantity of petrol?
Price (RM)
Quantity demanded (liter per day)
Quantity supplied (liter per day)
0.80
8
24
0.75
10
22
0.70
12
20
0.65
14
18
0.60
16
16
0.55
18
14
Table 1
Scenario 2: The Ministry of health publishes a study finding that coffee drinking reduces the probability of getting cancer.
How do you imagine this will affect the market for coffee? Why?
Which determinant of demand or supply is being affected? Explain.
Show graphically the changes in demand or supply.
Will this change the equilibrium price and quantity of coffee? Explain your reasoning.
Use the information/statement below to answer questions: 10.
Because of exceptionally good weather conditions, this year's supply of-eucumber in
Batinah is 20% greater than last year's supply. Assume that once cucumber is grown,
the supply curve for cucumber is perfectly inelastic. Also assume that the demand
curve for cucumber is the same this year as it was last year. If the price of cucumber
is 25% lower this year than it was last year, what can we conclude?
10. The price elasticity of demand for cucumber is:
a. -1.25
b. -1.00
© - 0.80
d. -0.25
Chapter 6 Solutions
Microeconomics: Principles & Policy
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