Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 8, Problem 7MC
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Assume that supply for cars increases for any given price and, at the same time, the demand for cars reduces for any given price. You can predict:
a. That the price of cars will unambiguously increase, while the car sales may increase or decrease.
b. That car sales will unambiguously decrease, while the car price may increase or decrease.
c. That the price of cars will unambiguously decrease, while the car sales may increase or decrease.
d. That car sales will unambiguously increase, while the car price may increase or decrease.
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Managerial Economics: A Problem Solving Approach
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- Suppose an increase in demand in the market for mutual funds (a financial capital market) causes the interest rate to increase from 2% to 4%. How will this increase in demand affect supply and quantity supplied?arrow_forwardWhich of the following will NOT shift the supply curve for lawnmowers? a. a change in the number of firms supplying lawnmowers b. an increase in the price of a substitute good c. an increase in the price of a resource used to produce lawnmowers d. a technological advancearrow_forwardUse the supply and demand model to predict how each of the following events would affect the auto market. Tell whether the demand or supply curve shifts, whether it is an increade and decrease, and report your predicted changes in price and quantity. 1. The price of gasoline falls significantly. 2. Improved technology raises productivity on auto assembly lines by 20% 3. The government starts giving sizable subsidies to public transportation.arrow_forward
- The rent for apartments in New York City has been rising sharply. Demand for apartments in New York City has been rising sharply as well. This is hard to explain because the law of demand says that higher prices should lead to lower demand. Do you agree or disagree? Explain your answer.arrow_forwardWhat are some general factors that can impact the demand for a product and the supply of a product? Identify at least two factors for each and explain the different ways these determinants can shift supply and demand either left or right.arrow_forwardYou observe the price of a latte changes from $7 to $5. Instructions: Round your answer to one decimal place. If you are entering a negative number include a minus sign. a. What is the percentage change in the price of a latte? 28.6% b. When the price decreases from $7 to $5, quantity demanded will increase and quantity supplied will decreasearrow_forward
- What is a relevant example of how a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service? Explain. Next, find a relatively recent news article (within the past year) to support your finding (the news search feature in Google is helpful with this). If you cannot find an article specific to your example, you may find an article about another similar good or service. Talk about the article and its findings, then include the URL.arrow_forwardThe price for a product might remain the same, or rise or fall over time. Regardless, over time people may purchase more of this product. Explain.arrow_forwardHow will an increase in population growth in Rock Hill affect the equilibrium price and quantities of residential houses? Plot a chart with supply and demand curves to illustrate your idea.arrow_forward
- WHEN DO YOU SAY THAT THERE IS EXCESS SUPPLY FOR A COMMODITY IN THE MARKET?arrow_forwardDraw the supply and demand curve for pencils. Gwinnett county provides every student with a laptop at school. What happens to the supply or demand for pencils. Why?arrow_forwardHow might companies such as Mars and Nestlé react to an increase in the price of sugar?arrow_forward
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