There is a movement along the same supply curve due to changes in Oa Price of factors Ob. All of the these O clevel of Technology Od. The price of the good Australia decides to construct 120 honpitals in the country so it has to reduce the construction of 300 schools. This concept is related to OaOpportunity cost Ob.Microeconomics Oc Marginal cost Od Price theory China is producing products using workers and they are not using machines. The central economic problem discussed in this context is O& What to produce? OB How to produce OC How much to produce? D Al of these

There is a movement along the same supply curve due to changes in Oa Price of factors Ob. All of the these O clevel of Technology Od. The price of the good Australia decides to construct 120 honpitals in the country so it has to reduce the construction of 300 schools. This concept is related to OaOpportunity cost Ob.Microeconomics Oc Marginal cost Od Price theory China is producing products using workers and they are not using machines. The central economic problem discussed in this context is O& What to produce? OB How to produce OC How much to produce? D Al of these

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 3PA

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Identify each of the following as involving either demand or supply. Draw a circular flow diagram and label the flows A through F. (Some choices can be on both sides of the goods market.) Households in the labor market Firms in the goods market Firms in the financial market Households in the goods market Firms in the labor market Households in the financial market
Draw a model: Consider the market for corn. Suppose that right now, the equilibrium price is considered “too low” by farmers (i.e. suppliers) in order to make a living. These farmers go to their state representatives and convince them to enact a price floor that is above the equilibrium price. Depict this situation graphically. Is there a shortage or a surplus (or does nothing happen)? Now, conceptually, describe how we know with certainty, that consumers are harmed by this policy. Then, describe conceptually how farmers may be harmed or may benefit from this policy. Graphically depict how we know that consumers are harmed while farmers may be better or worse off (ambiguous). If we were to consider the “total surplus” of consumers and farmers, can we say with certainty whether this economy is better or worse off from the price floor?
During a war, a government will often draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items? A. The value of the civilian goods no longer produced by the new soldiersB. The cost of feeding and clothing the new soldiersC. The dollar cost of the payrollD. The higher prices of civilian goods due to wartime shortagesE. The cost of transporting the soldiers to combat
5A. Explain how microeconomics differs from macroeconomics. Which of the following headlines, taken from the various issues of The Daily Graphic, deal with microeconomics:“Nestle Ghana posted a 18% increase in sales”“GRIDCO plans to slash more jobs”“Ghana’s Output Grew by 5.8%”“Housing starts soared 10% in September”“Ghana to Breach key Deficit Target it helped to create” Explain each issue why it is a microeconomic issue5.B Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.
The accompanying graph shows the labor market in the country of Harmonia. Assume that the Harmonia labor market is in equilibrium the Harmonian government decides to enact a minimum wage of $6.A. Show the new minimum wage on the graph by shifting the minimum wage line. B. What is the increase in unemployment as a result of the minimum wage?C. Which type of unemployment is affected by the new minimum wage?
A storm destroys several factories, thereby reducingthe stock of capital. What effect does this event haveon fac tor markets?a. Wages and the rental price of capital both rise.b . Wages and the rental proce of capital both fall.c. Wages rise and the rental price of capital falls.d . Wages fall and the rental price of capital rises.
Review the discussion of pitfallsin economic thinking in this chapter. Then identify the fallacy, ormistake in thinking, in each of the following statements:a. Raising taxes always increases government revenues.b. Whenever there is a recession, imports decrease. Therefore, tostop a recession, we should increase imports.c. Raising the tariff on imported steel helps the U.S. steel industry.Therefore, the entire economy is helped.d. Gold sells for about $1,200 per ounce. Therefore, the U.S.government could sell all the gold in Fort Knox at $1,300 perounce to reduce the national debt.
Assuming hypothetical equilibrium in Demand/Supply Model of Apples, illustrate impact of following events:Suppose the Doctors recommend eating Apples every morning. The Monsoon rains adversely affect the Apple Harvest. The government announces increase in Wages of workers. The price of petrol in the market comes down. Consumers Income falls during government imposed Lockdowns due to health concerns. Given below is the Supply Schedule of Nestle Milk per liter:Price of Milk per liter (in Rs) 100 200 300 400Quantity Supplied per day in liters (in 1000s) 100 200 300 400Use the above data to illustrate the Supply Curve in a graph with complete labels. Assume Rs. 200 is the original price of milk per liter and 200,000 liters is the original quantity of supply. Suppose the price rises from Rs. 200 to Rs. 300, what will be the amount of Quantity Supplied?Illustrate the impact of (C) on the graph. Is this a movement along the supply curve or shift of the curve?
A visiting American executive finds that a foreign subsidiary inBangladesh has hired a 12-year-old girl to work on a factoryfloor, in violation of the company's prohibition on child labour.He tells the local manager to replace the child and tell her to goback to school. The local manager tells the American executivethat the child is an orphan with no other means of support, andshe will probably become a street child if she is denied work. explain Cultural Relativist based on the statement given
Supply chain shortages have limited the number of microchips available to car manufacturersin the US. Since every new car needs microchips to control it, we can think of a limit on thenumber of microchips as a quota on the production of new cars. If this quota is binding,which of the following may be a market consequence of a production quota on new cars in theUS market? Do not worry about the underlying facts; only whether the explanations makeeconomic sense given our model. (Select one or more) (a) The quantity supplied of new cars will rise to meet the quota.(b) The quantity supplied of new cars will fall to meet the quota.(c) The quantity supplied is unaffected by a binding quota.(d) The price of new cars will rise until there is no excess demand.(e) The price of new cars will fall until there is no excess demand.(f) Consumer surplus will increase as a result of the quota.(g) Consumer surplus will decrease as a result of the quota.(h) Consumer surplus will be unaffected by the…
42. In Mark Skousen’s article, “What is Economics, Anyway?,” he bemoans the apparent fact that the modern definition of economics is incomplete. What does he say is missing? A. relationship between means and endsB. the concept of scarcityC. the process of transformation of resourcesD. allocation toward competing ends 43. The broken window fallacy a. explains why inflation is so high.b. is a justification for the government to print more money.c. is illustrated when a government program is justified not on its merits but on thenumber of jobs it will create.d. has nothing to do with public policy. 44. Capitalism was originally a smear used by which socialist founder? A. Adam SmithB. Jean-Jacques RousseauC. Vladimir LeninD. Karl MarxE. Paul Krugman 45. How does subjective value make “gains from trade” possible? 46. Think back to August 6, 1945. The United States has just dropped an atomic weapon on the city of Hiroshima killing tens of thousands of Japanese and devastating the…
Whether the product market or the labor market, what happens to line equilibrium price and quantity for each of the four possibilities: increase in demand, decrease in demand, increase in supply; and decrease in supply.