Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter 7A, Problem 1E
To determine
Special attention to the price spike in mid 2008 of crude oil.
Expert Solution & Answer
Explanation of Solution
From the provided information, during 2002-2012, country U is using alternate fuel i.e. natural gas as this resource availability is plentiful in the country NA.
When country U requires resources like crude oil and gasoline, country S increased the prices on gasoline. Indeed, country U applied same policy for the prices of natural gas. As a result, crude oil prices were lowered by Saudi and more oil is extracted for supply.
Economics Concept Introduction
Introduction:
Price hike is the sudden increase in price level of a good due to unforeseen reason.
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Students have asked these similar questions
The numbers i have in are all incorrect, please help
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The domestic supply and demand curves for Jolt coffee beans are given by P= 20 + 1Q and P= 140-2Q, respectively,
where Pis the price in dollars per bushel, and Q is the quantity in millions of bushels per year. The United States produces
and consumes only a trivial fraction of world Jolt bean output, and the current world price of $35/bushel is unaffected by
events in the U.S. market. Transportation costs are also negligible.
Instructions: Enter your answer for price to the nearest dollar. For the number of bushels, enter your answer rounded to 1
decimal place.
D
a. How much will U.S. consumers pay for a bushel of Jolt coffee beans, and how many bushels per year will they consume?
Price: $ 60/bushel
Number of bushels:
40 million bushels per year.
Instructions: Enter your answer for price to the nearest dollar. For the number of bushels, enter your answer to the nearest
million.
b. How will your answers to part (a) change if…
Assume Canada is a large importer of raw materials from Otherland. Which of the following would likely result from a recession in Canada?
A) An increase in Otherland's GDP
B) A fall in Otherland's GDP
C) An increase in Otherland's unemployment
D) A fall in Otherland's unemployment
E) Any of the above
X O F) Both (B) and (C) only
Problem #3. Suppose the official price of 1 ounce of gold in the US is 21.60 dollars and the official
price of gold in the UK is 3.5 pounds sterling.
3A. Assuming no transport costs, the value of 1 pound sterling is
US dollars.
Now suppose there are transport costs for shipping gold from one market to another. The value of
one currency in terms of another will no longer be constant; instead, it can fluctuate within a range.
These we referred to as gold points. If the exchange rate should fall outside of this range, gold will be
snipped from one market to another.
Assume that it costs 5% of the purchase price (paid by the buyer) to ship gold from one market to
O
another.
3B. The lower value of 1 pound sterling in terms of the dollar in this range will be and the wor
upper value of this range will be
Show your work and explain your answer below.
Chapter 7A Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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