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 9MC
To determine
Shift of
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Students have asked these similar questions
"A decrease in supply will lead to an increase in the price, which decreases demand, thus lowering price. Thus, a decrease in supply has no effect on the price of a good." Evaluate this statement.
Refer to the figure above. Assume the market is originally at point W. Movement to point Y is a combination of:
A. an increase in quantity supplied and an increase in demand.
B. an increase in supply and an increase in demand.
C. an increase in supply and an increase in quantity demanded.
D. a decrease in supply and an increase in quantity demanded.
Consider the market for cheese. If the price of milk increases, what will be the consequences?
The supply of cheese would rise.
The demand for cheese would fall.
The supply of cheese would fall.
The demand for cheese would rise.
Chapter 8 Solutions
Managerial Economics: A Problem Solving Approach
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- Explain why a demand curve will shift. Explain why a supply curve will shift. What are the differences between quantity demanded and demand? Provide examples from your personal or professional life where you believe a demand curve shifted and when you believed a supply curve shifted.arrow_forwarda. In December, the price of Christmas trees rises, and the quantity of trees sold rises. Is this a violation of the law of demand?b. Explain what it means when the supply of television sets rises. Explain what it means when the quantity supplied of television sets rises. Explain how the price of television sets could rise, and yet the supply of television sets not change.c. Evaluate the following statement: “The demand for Ghana oranges has increased because the quantity of Ghana oranges demanded in Burkina Faso has risen.” Q2 a. (i). Draw a graph showing equilibrium in the money market. Carefully label all curves andaxes and explain why the curves have the slopes they do.(ii). Using the graph you prepared in a(i), illustrate and explain what happens when the Central Bank decreases the money supply.(iii). When the Central Bank decreases the money supply, the equilibrium level of income changes. Illustrate and explain how.b. Ghana Commercial Bank has total deposits of GH¢2,000,000 and…arrow_forwardThe figure above shows a market that is originally at equilibrium at Point A, the intersection between been supply curve S1 and demand curve D1. Which of the following events would result in the market reaching a new equilibrium at Point C? Question 10Answer a. An increase in supply and a decrease in the quantity demanded. b. A decrease in supply and an increase in the quantity demanded. c. A decrease in the quantity supplied and a decrease in demand. d. A decrease in supply and a decrease in the quantity demanded.arrow_forward
- Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram. Create a sketch of the diagram if necessary. a. Cars are becoming more fuel efficient, and therefore get more miles to the gallon. b. The winter is exceptionally cold. c. A major discovery of new oil is made off the coast of Norway. d. The economies of some major oil-using nations, like Japan, slow down. e. A war in the Middle East disrupts oil-pumping schedules. f. Landlords install additional insulation in buildings. g. The price of solar energy falls dramatically. h. Chemical companies invent a new, popular kind of plastic made from oil.arrow_forwardSuppose that many vineyards in California were burned by wildfires during and shortly after the release of the movie Sideways. If both the quantity sold and price of Pinot Noir increased in the market after the movie release, what does this imply? Select one: a. The decrease in supply was greater than the increase in demand. b. The increase in demand was greater than the decrease in supply. C. The increase in supply was greater than the decrease in demand. d. The decrease in demand was greater than the increase in supply.arrow_forwardSuppose we are analyzing the market for Sweet "Halwa" .What will happen to the equilibrium price and quantity of sweet if the price of sugar rises a little during Ramadan and Eid al-Fitr? Select one: a. Price will stay exactly the same and Quantity will decrease b. Price will increase and the Quantity will decrease c. Quantity will stay exactly the same and the price will increase d. None of the answers are correct e. Price will increase and the Quantity will increase O f. Price will decrease and the Quantity will decreasearrow_forward
- a. Do you agree with the following statements? Explain your answers. i. The price of butter rises, causing the demand for another good to fall. This implies that the goods are substitutes. ii. During the pandemic, incomes fell for many Bahamians this change would likely lead to a decrease in the prices of both normal and inferior goods. iii. If the demand and supply of lobster increases at the same time price will rise. iv. The price of milk falls. This causes an increase in the price of good cheese. Therefore, milk and cheese are complements.arrow_forwardThe following supply and demand schedule provides data regarding Burger King's Whopper burgers. Plot the supply and demand curves and answer the questions below. Whopper Burgers Price Quantity Demanded Quantity Supplied 7 4 2. 7. 4. What would happen if Burger King executives arbitrarily decided to change the price of Whoppers from 6 dollars to 5 dollars? a. This new price would change the supply of Whoppers. b. This would cause a surplus, because the quantity of Whoppers supplied exceeds the quantity of Whoppers demanded at that price. c. This would cause a shortage, because the quantity of Whoppers demanded exceeds the quantity of Whoppers supplied at that price. X d. This new price would change the demand of Whoppers.arrow_forwardThe market for pizza has the following demand and supply schedules:a.Graph the demand and supply curves.What are the equilibrium price and quantity in this market?b.If the actual price in this market were above the equilibrium price,what would drive the market towards the equilibrium?c.If the actual price in this market were below the equilibrium price,what would drive the market towards the equilibrium?arrow_forward
- Which of the following demonstrates the law of demand? a. When car production technology improved, car producers increased their supply of cars b. When ketchup prices rose, buyers decreased their quantity demanded of ketchup c. When consumers expected sweater prices to rise in the near future, they decreased their current demand of sweaters d. When the price of leather belts rose, sellers increase their quantity supplied of leather beltsarrow_forwardThe market for pizza has the following demand and supply schedules:a. Graph the demand and supply curves. What are the equilibrium price and quantity in this market?b. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?c. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibriumarrow_forwardSuppose that today the market for homes is in equilibrium. Tomorrow both the supply and demand curves for homes will shift to the right. As a result, the equilibrium price . ad the equilibrium quantity Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a will rise; cannot be determined b will fall; cannot be determined C cannot be determined; will rise d cannot be determine; will fallarrow_forward
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