Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 32P
Imagine that to preserve the traditional way of life in small fishing villages, at government decides to impose a
- Using the
demand and supply framework, predict the effects on the price, quantity demanded, and quantity supplied. - With the enactment of this price floor for fish, what are some of the likely unintended consequences in file market?
- Suggest some policies other than the price floor to make it possible for small fishing villages to continue.
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Imagine that to preserve the traditional way of life in small fishing villages, a government decides to impose a price floor that will guarantee all fishermen a certain price for their catch.
Using the demand and supply framework, predict the effects on the price, quantity demanded, and quantity supplied.
With the enactment of this price floor for fish, what are some of the likely unintended consequences in the market?
Suggest some policies other than the price floor to make it possible for small fishing villages to continue.
The following graph shows the labour market in the fast-food industry in the fictional town of Supersize City.
Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Graph Input Tool
Market for Labour in the Fast-Food Industry
20
I Wage
(Dollars per hour)
18
6
Supply
16
Labour Demanded
(Thousands of
workers)
Labour Supplied
(Thousands of
workers)
700
210
14
Demand
70 140 210 280 350 420 490 560 630 700
LABOUR (Thousands of workers)
workers.
In this market, the equilibrium hourly wage is $
, and the equilibrium quantity of labour is
WAGE (Dollars per hour)
3. Minimum wage legislation
The following graph shows the labour market in the fast-food industry in the fictional town of Supersize City.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Graph Input Tool
(?
20
Market for Labour in the Fast-Food Industry
18
I Wage
(Dollars per hour)
16 +
Labour Demanded
(Thousands of
workers)
Labour Supplied
(Thousands of
workers)
Supply
480
200
14
12
10
Demand
80 160 240 320 400 480 580 640 720 800
LABOUR (Thousands of workers)
WAGE (Dollars per hour)
Chapter 4 Solutions
Principles of Economics 2e
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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- Graph Input Tool (? Market for Labor in the Fast Food Industry 20 I Wage (Dollars per hour) 18 6. 16 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) Supply 232 14 12 10 Demand 4 40 80 120 160 200 240 280 320 360 400 LABOR (Thousands of workers) WAGE (Dollars per hour)arrow_forwardThe weekly demand and supply schedules for T-shirts (in millions) in a free market are as follows: Price Quantity demanded Quantity supplied 8 6 18 7 8 16 6 10 14 5 12 12 4 14 10 3 16 8 2 18 6 1 20 4 4.Assume that changes in fashion cause the demand for T-shirts to rise by 4 million at each price. What will be the new equilibrium price and quantity? Has equilibrium quantity risen as much as the rise in demand? Explain why or why not. 5.Now plot the data in the table and mark the equilibrium. Also plot the new data corresponding to (b).arrow_forwardFigure 19-6 25.00 Demand Supply 22.50 20.00 17.50 15.00 12.50 10.00 7.50 5.00 2.50 10 20 30 40 50 60 70 80 90 100 QUANTITY OF LABOR (Worker hours) Refer to Figure 19-6 . This figure depicts labor demand and supply for the widget industry. The market equilibrium wage is $15. If the minimum wage in the economy is $10, how many hours of labor will be demanded from firms in the widget industry? Оа. 10 Ob. o Ос. 60 Od. 90 WAGEarrow_forward
- Consider a poor country confronting the rising price of eggs, an important food source for the population. The government considers imposing a price ceiling to keep the price of eggs at an affordable level for the population. The price ceiling would cause the following... Group of answer choices At the new price, fewer egg producers would supply the market and there would be fewer eggs available on the market. The quantity of eggs demanded and supplied to the market would rise and the market would reach a new better equilibrium The market will get the signal that more eggs are needed and more producers will join the market to raise production. The population would be able to afford more eggs and improve their situation.arrow_forwardUse the graph below to answer the following questions: Price $15 Supply $14 $13 $12 $11 $10 Demand 25 75 125 175 225 275 Quantityarrow_forwardThe following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. WAGE (Dollars per hour) 20 18 16 14 12 2 0 0 1 Supply Demand 90 180 270 360 450 540 630 720 810 900 LABOR (Thousands of workers) In this market, the equilibrium hourly wage is $ Graph Input Tool Market for Labor in the Fast Food Industry Wage (Dollars per hour) Labor Demanded (Thousands of workers) 6 900 and the equilibrium quantity of labor is Labor Supplied (Thousands of workers) ? 378 thousand workers.arrow_forward
- In this market, the equilibrium price is per box, and the equilibrium quantity of blueberries is million boxes. For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price Quantity Demanded Quantity Supplied Pressure on Prices (Dollars per box) (Millions of boxes) (Millions of boxes) 15 35 True or False: A price ceiling below $25 per box is not a binding price ceiling in this market. True False Because it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant blueberries on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of blueberries…arrow_forwardDetermine the effect on the market of “watches”, by first showing the graph of demand and supply equilibrium, and how the 3 conditions affect the market of watches? Justify your points by proving it graphically. Current Equilibrium price of watches = $260 Quantity demanded against the equilibrium = 500 Condition 1: Price ceiling has been imposed by government = $200 Condition 2: Price floor has been set to = $200 Condition 3: If Price floor has been imposed by government of price = $300arrow_forwardSuppose the equilibrium price for soccer tickets in a free market results in 15,000 tickets being purchased. Major League Soccer has decided to impose a price control of $19 per ticket. At a price of $19, soccer teams would be willing to supply 11000 tickets. At this price, consumers are willing to purchase 25500 tickets. Which of the following is a result of the price control?There will be a __ of ___ ticketsarrow_forward
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