In each of the following scenarios, the market is initially in equilibrium. Determine the impact each event would have on the given market. a. New advances in recycling technology reduce the cost of producing paper made from recycled material. 1. Which of the following will occur in the market for paper made from recycled material? supply will decrease demand will increase supply will increase demand will decrease 2. Will the advancement in recycling technology result in a shortage or surplus of paper made from recycled material at the previous price? Will the price of paper made from recycled material rise or fall? surplus, rise shortage, fall shortage, rise surplus, fall b. Suppose General Electric, one of the largest suppliers of light bulbs, decides to discontinue its production of light bulbs. 1. Which of the following will occur in the market for light bulbs? demand will decrease demand will increase supply will increase supply will decrease 2. Will General Electric's exit from the light bulb market result in a shortage or surplus of light bulbs at the previous price? Will the price of light bulbs rise or fall? surplus, rise shortage, fall shortage, rise surplus, fall c. A heat wave in Las Vegas causes tourists to cancel their hotel room reservations and vacation elsewhere. 1. Which of the following will occur in the demand for Las Vegas hotel rooms? supply will decrease supply will increase demand will decrease demand will increase 2. Will the heat wave result in a shortage or surplus of Las Vegas hotel rooms at the previous price? Will the price of hotel rooms rise or fall? shortage, fall shortage, rise surplus, rise surplus, fall

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 3PA: Consider the market for minivans. For each of the events listed here, identify which of the...

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In each of the following scenarios, the market is initially in equilibrium. Determine the impact each event would have on the given market.

a. New advances in recycling technology reduce the cost of producing paper made from recycled material.

1. Which of the following will occur in the market for paper made from recycled material?

supply will decrease

demand will increase

supply will increase

demand will decrease

2. Will the advancement in recycling technology result in a shortage or surplus of paper made from recycled material at the previous price? Will the price of paper made from recycled material rise or fall?

surplus, rise

shortage, fall

shortage, rise

surplus, fall

b. Suppose General Electric, one of the largest suppliers of light bulbs, decides to discontinue its production of light bulbs.

1. Which of the following will occur in the market for light bulbs?

demand will decrease

demand will increase

supply will increase

supply will decrease

2. Will General Electric's exit from the light bulb market result in a shortage or surplus of light bulbs at the previous price? Will the price of light bulbs rise or fall?

surplus, rise

shortage, fall

shortage, rise

surplus, fall

c. A heat wave in Las Vegas causes tourists to cancel their hotel room reservations and vacation elsewhere.

1. Which of the following will occur in the demand for Las Vegas hotel rooms?

supply will decrease

supply will increase

demand will decrease

demand will increase

2. Will the heat wave result in a shortage or surplus of Las Vegas hotel rooms at the previous price? Will the price of hotel rooms rise or fall?

shortage, fall

shortage, rise

surplus, rise

surplus, fall

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