Economics For Today
9th Edition
ISBN: 9781305507074
Author: Tucker, Irvin B.
Publisher: Cengage Learning,
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Chapter 4, Problem 18SQ
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Describe the shift of supply.
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Assume that Grainland currently produces wheat and does not trade wheat in international markets.
(a) Draw a correctly labeled demand and supply graph for the domestic wheat market in Grainland. Label the equilibrium price, Pe, and the equilibrium quantity, Qe.
Assume that Grainland currently produces wheat and does not trade wheat in international markets.
(a) Draw a correctly labeled demand and supply graph for the domestic wheat market in Grainland. Label the equilibrium price, PePe, and the equilibrium quantity, QeQe.
(b) Suppose the price of wheat in the world market is lower than the domestic price of wheat in Grainland. Assume now Grainland wants to trade wheat in the world market.
(i) On your graph from part (a), label the world market price of wheat as PWPW, and identify the domestic quantity demanded of wheat at PWPW, as Q3Q3, and the domestic quantity supplied of wheat labeled as Q1Q1.
(ii) Will Grainland export or import wheat? Explain.
(c) With international trade in wheat, who will benefit in Grainland: domestic producers, domestic consumers, neither or both? Explain.
(d) Suppose that the government of Grainland decides to provide a subsidy for wheat farmers to make the country more competitive and sell wheat at the world market…
Demand for cookies is of the following form: P=20-4QD, where QD is millions of cookies demanded per year and P is price in US dollars. Supply of cookies of the following form: P=6+Qs, where QS is millions of cookies supplied per year and P is price in US dollars. a. What is the equilibrium quantity of cookies traded? Solve the equation, showing your work. b. Graph the supply and demand curves, marking their intersection. Be sure to label intercepts, equilibrium, etc. c. The government imposes a tax of $2 per cookie on producers of cookies. What is the new equilibrium quantity of cookies traded? Solve the equation, showing your work. d. In a graph, show how the supply curve has shifted. What price do consumers now pay? After paying the tax, how much to producers receive.
Chapter 4 Solutions
Economics For Today
Ch. 4.2 - Prob. 1YTECh. 4.2 - Prob. 2YTECh. 4.2 - Prob. 3YTECh. 4.2 - Prob. 4YTECh. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQP
Ch. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQPCh. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 16SQCh. 4 - Prob. 17SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQCh. 4 - Prob. 20SQ
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- Assume that the equilibrium price of French fries rises, while the equilibrium quantity falls. The most consistent explanation for this observation is:a. An increase in the price of onion rings (a substitute for French fries).b. A fall in the price of onion rings.c. A rise in the price of potato bread (production-side substitute for French fries)d. A fall in the price of potato bread.Note: the answer is alternative C) and you are asked to argue why it is correct; and further argue why the other alternatives are false or uncertain.arrow_forwardSuppose the current price of a good is $125. At this price, the quantity supplied is 150 units, and the quantity demanded is 110 units. For every $1 decrease in price, the quantity supplied decreases by 5 units and the quantity demanded increases by 3 units. At the current price, the quantity demanded isless than the quantity supplied. This means that the market is currently experiencing a . In order to adjust, the market price will until the quantity demanded and quantity supplied are equal. The result is an equilibrium quantity of and an equilibrium price of .arrow_forwardWhich of the following is true about quantity supplied? * The quantity supplied of a good is equal to the difference between the quantity available and the quantity desired by all consumers and producers. The quantity supplied of a good is the same thing as the quantity demanded at each price. The quantity supplied of a good is the amount that the producers are planning to sell at a particular price during a given time period. The quantity supplied of a good is the amount the firm would sell if it faced no resource constraints.arrow_forward
- Given the products and conditions below, indicate how the events affect the demand, supply, equilibrium price and quantity of the goods. (a) Videotapes. The price of DVDs and DVD players decreases. New technology makes videotapes easier to produce. The shift in demand is greater than shift in supply. (b) Roses. The Valentine’s Day season has just begun for the floral industry. A new pesticide decreases the number of flowers affected by pests. The shift in supply is greater than the shift in demand. (c) Tomatoes. FDA publicly announces that eating tomatoes and tomato-based products can significantly reduce one’s risk of developing cancer. An unexpected freeze late in the tomato season destroys a significant portion of this year’s crop. The shift in supply is greater than shift in demand. (d) Healthcare. Highly publicized malpractice cases decrease consumer confidence in healthcare providers. Malpractice insurance premiums paid by doctors increase. The shift in…arrow_forwardExplain the notions of market equilibrium/disequilibrium and underlying factors influencing demand and supply and resultant changes to market equilibrium prices and quantity for normal goods.arrow_forwardConsider the following scenarios. Think about how each scenario would affect the price of khaki pants. A new technology reduces the time it takes to make a pair of khaki pants. The price of the cloth used to make khaki pants falls. The wage rate paid to garment workers increases. The price of jeans increases. People's incomes increase. Assignment: Address the following statements related to the scenario above. Does each event change demand, supply, both, or neither? Explain your choice. Does the event increase or decrease demand and/or supply? Explain your answer. How does this change in demand and/or supply affect the equilibrium prices and quantity within the market? Part 2 Compare the new demand curve or supply curve by drawing it on a graph Find the new equilibrium and compare it with the original one in terms of equilibrium price and quantity and explain your findingsarrow_forward
- Same question screenshot is attached Assume that Grainland currently produces wheat and does not trade wheat in international markets. (a) Draw a correctly labeled demand and supply graph for the domestic wheat market in Grainland. Label the equilibrium price, PePe, and the equilibrium quantity, QeQe. (b) Suppose the price of wheat in the world market is lower than the domestic price of wheat in Grainland. Assume now Grainland wants to trade wheat in the world market. (i) On your graph from part (a), label the world market price of wheat as PWPW, and identify the domestic quantity demanded of wheat at PWPW, as Q3Q3, and the domestic quantity supplied of wheat labeled as Q1Q1. (ii) Will Grainland export or import wheat? Explain. (c) With international trade in wheat, who will benefit in Grainland: domestic producers, domestic consumers, neither or both? Explain. (d) Suppose that the government of Grainland decides to provide a subsidy for wheat farmers to make the country more…arrow_forwardUsing a graph, explain how an increase in technology will effect the equilibrium price and quantity of DVD players. Again using a graph, explain what happens in the market for video cassette recorders. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardTask 6. Let us assume that a product has the demand function and supply function displayed below: QD = 16 - 4P Qs s=-2 + 2P, where Qp is quantity demanded, Qs is quantity supplied, P is the price. a) calculate the equilibrium price and the equilibrium quantity if the new price is set at the level of 2 euro, calculate: b) quantity demanded QD c) quantity supplied Qs d) quantity sold Qsold e) will there be a shortage or a surplus? How many units? ATR= f) change in total revenues of producer/sellerarrow_forward
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