Barcelona and Los Angeles are similar, except Barcelona has a good public transportation system and Los Angeles does not. Auto insurance will probably be more expensive in _____ since the _____ for insurance is _____. Select one: a. Barcelona; demand; higher than it is in Los Angeles b. Barcelona; supply; lower than it is in Los Angeles c. Los Angeles; demand; higher than it is in Barcelona d. Los Angeles; supply; lower than it is in Barcelona

Barcelona and Los Angeles are similar, except Barcelona has a good public transportation system and Los Angeles does not. Auto insurance will probably be more expensive in ___ since the _ for insurance is ___. Select one: a. Barcelona; demand; higher than it is in Los Angeles b. Barcelona; supply; lower than it is in Los Angeles c. Los Angeles; demand; higher than it is in Barcelona d. Los Angeles; supply; lower than it is in Barcelona

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

See similar textbooks

Similar questions

Graph the market for an illegal drug and explain the shape of each curve. List at least four ways the US govt. fights the “war on drugs” and identify each as either a supply-side or a demand-side strategy. On a new graph, illustrate a large decrease in supply and explain the result in terms of market P and Q. On a third graph, illustrate a small decrease in demand and explain the new result. Based on Parts 3 and 4, which strategies—supply or demand—are more effective in decreasing quantities of illegal drugs that are exchanged in these markets?
Graph the market for an illegal drug and explain the shape of each curve. List at least four ways the US govt. fights the “war on drugs” and identify each as either a supply-side or a demand-side strategy. On a new graph, illustrate a large decrease in supply and explain the result in terms of market P and Q. On a third graph, illustrate a small decrease in demand and explain the new result. Based on Parts 3 and 4, which strategies—supply or demand—are more effective in decreasing quantities of illegal drugs that are exchanged in these markets? If you were the head of the US Congressional Finance Committee, how would you allocate funds among these strategies and why?
In much of Europe, the legal age to obtain a driver's license is 18. If the legal driving age in the United States was changed to 18, how would this affect the market for new automobiles? The market for automobile insurance?
Imagine a market for used computers. There are two types of computers: good and bad. Also imagine that there are 50% of each on the market. Buyers can imagine paying 5,000 for a good computer and 1,000 for a bad computer Sellers want at least 4000 for a good computer and 1500 for a bad computer a-What would happen in the market if both sellers and buyers can observe the quality? What type (s) would be sold and what would the price be?b-Assume that the buyer thinks that there is a 50% probability that the computer is of poor quality. What is the expected value and price of a computer that the buyer most wants to pay?c-What would happen in the market if the buyer thinks that there is a 50% probability that the computers are of poor quality? What type (s) would be sold and what would the price be?d-What would happen over time in the market when buyers can observe the quality of computers through transactions?
The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. a. How will the demand for good X change if consumer incomes decrease? b. How will the demand for good Y change if consumer incomes increase? c. How will the demand for good X change if the price of good Y increases? d. Is good Y a lower-quality product than good X? Explain.
1.Given the products and conditions below, indicate how the events affect the demand, supply, equilibrium price and quantity of the goods. A. Healthcare. Highly publicized malpractice cases decrease consumer confidence in healthcare providers. Malpractice insurance premiums paid by doctors increase. The shift in demand is greater than shift in supply.
Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should A.) “fight fire with fire” by decreasing supply of its doll for six weeks and then increasing the supply. B.) increase the supply of its doll now before the other doll hits the market. C.) increase the price of its doll now. D.) discontinue its doll.
Demand-side market failure is when there is a shortage of a good in the market. True False
Explain how the opioid epidemic could be ia supply problem caused by the oversupply of prescription pain meds, drug traffickers and illegal drug manufacturers. Draw a graph.
A website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent examinations of their emerald, which are available to the customer for inspection. a. How would you expect this improved information to affect demand for emeralds on this website? b. How would you expect this improved information to affect the quantity of high-quality emeralds sold on the website?
Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market? A) The supply curve will shift to the right, causing the price of cauliflower to rise. B) The supply curve will shift to the right, causing the price of cauliflower to fall. C) The demand curve will shift to the right, causing the price of cauliflower to rise. D) The demand curve will shift to the left, causing the price of cauliflower to fall.
Picture a scenario in which the fashion industry is suffering from monopolistic price gouging and a dwindling demand (due to the existence of sweatshops and environmentally unfriendly business practices). A hypothetical situation such as this is likely to cause high unemployment in the fashion industry. What could the government do to correct this market failure? Including diagrams where/if appropriate)