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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily.

a. How would this apple-a-day law affect the demand and equilibrium price of apples?

b. How would the law affect the marginal product and the value of the marginal product of apple pickers?

c. How would the law affect the demand and equilibrium wage for apple pickers?

Subpart (a):

To determine
The demand and equilibrium price of apple.

Explanation

The new law where all Americans are required to eat an apple daily increases the demand of apples in America.  The shift in the demand curve of apples is shown bellow.

Figure 1 shows the shift of the demand curve.

Subpart (b):

To determine
The demand and equilibrium price of apple.

Subpart (c):

To determine
The demand and equilibrium price of apple.

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