In each of the following scenarios, the market is initially in equilibrium. Determine the impact each event would have on the given market. SELECT THE CORRECT ANSWER IN EACH SITUATION 1. New advances in recycling technology reduce the cost of producing paper made from recycled material. a. Which of the following will occur in the market for paper made from recycled material? -supply will decrease -supply will increase -demand will decrease -demand will increase b. 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, rise -shortage, fall -surplus, fall 2. Suppose General Electric, one of the largest suppliers of light bulbs, decides to discontinue its production of light bulbs. a. Which of the following will occur in the market for light bulbs? -demand will increase -supply will decrease -demand will decrease -supply will increase b. 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? shortage, fall surplus, rise shortage, rise surplus, fall 3. A heat wave in Las Vegas causes tourists to cancel their hotel room reservations and vacation elsewhere. a. Which of the following will occur in the demand for Las Vegas hotel rooms? -supply will increase -demand will decrease -demand will increase -supply will decrease b. 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? -surplus, fall -shortage, fall -surplus, rise -shortage, rise

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

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.

SELECT THE CORRECT ANSWER IN EACH SITUATION

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

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

-supply will decrease

-supply will increase

-demand will decrease

-demand will increase

b. 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, rise

-shortage, fall

-surplus, fall

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

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

-demand will increase

-supply will decrease

-demand will decrease

-supply will increase

b. 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?

shortage, fall

surplus, rise

shortage, rise

surplus, fall

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

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

-supply will increase

-demand will decrease

-demand will increase

-supply will decrease

b. 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?

-surplus, fall

-shortage, fall

-surplus, rise

-shortage, rise

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