PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 3, Problem 1P
To determine
The impact on the supply curve in different situations.
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The market for organic and locally sourced foods has skyrocketed over the past decade as consumers focus on improving their eating habits. However, severe droughts have caused organic food prices to rise significantly, forcing many consumers to shop at conventional supermarkets (which are increasingly adding organic food options) instead of organic food markets such as Whole Foods. In response, companies such as Whole Foods have begun offering more nonorganic options on their store shelves in order to provide their consumers with more affordable options. Based on this response, what did companies such as Whole Foods realize about the elasticity of demand for organic foods that caused them to lower their prices by changing the type of foods they sell?
Refer to the diagram above. What is the significance of the point at the top of the backward bending of the supply curve marked L3?
Question 2 options:
as wages increase over this range, the quantity of hours worked also increases.
as wages increase over this range, the quantity of hours worked changes very little.
as wages increase of this range, the quantity of hours worked is more inelastic.
as wages increase over this range, the quantity of hours worked actually decreases.
Consider the coffee market and the sugar market. Suppose that these two goods are complements. For each of these two goods, the demand curve is decreasing, while the gold curve is increasing. If the demand for coffee increases, then the equilibrium market price for sugar :
a)decreased.
(b) remains unchanged.
(c) increases
(d) There is not enough information to conclude.
Chapter 3 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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