PRINCIPLES OF ECONOMICS
14th Edition
ISBN: 2810015433483
Author: OpenStax
Publisher: OpenStax
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Textbook Question
Chapter 3, Problem 51CTQ
Why would a free market mar operate at a quantity greater than the
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Why would a free market never operate at aquantity greater than the equilibrium quantity? Hint:What would be required for a transaction to occur at thatquantity?
h. how many bushels will be sold if the market price is US$14 per bushel?
i. if the market price is US$ 16 per bushel , what must happen to restore equilibrium in the market ? Explain
A market consists of groups of buyers and sellers of a good or service. Market equilibrium represents the price at which the quantity of goods supplied is balanced with the number of goods consumers are willing and able to buy.
Consider the market for coffee:
Assume first that there is a heatwave that damages a large portion of coffee beans. Describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity?
Next, assume there is a new study that finds enormous health benefits to coffee consumption. Again, describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity?
Now, extend your analysis to what might happen if both of these events (weather which damages coffee beans and positive news on the health benefits of coffee) happen…
Chapter 3 Solutions
PRINCIPLES OF ECONOMICS
Ch. 3 - Review Figure 3.4. Suppose the price of gasoline...Ch. 3 - Why do economists use the ceteris paribus...Ch. 3 - In an analysis of the market for paint, an...Ch. 3 - Many changes are affecting the market for oil....Ch. 3 - Lets think about the market for air travel. From...Ch. 3 - A tariff is a tax on imported goods. Suppose the...Ch. 3 - What is the effect of a price ceiling on the...Ch. 3 - Does a price ceiling change the equilibrium price?Ch. 3 - What would be the impact of imposing a price flour...Ch. 3 - Does a price ceiling increase the decrease the...
Ch. 3 - If a price floor benefits producers, why does a...Ch. 3 - What determines the level of prices in a market?Ch. 3 - What does a downward-sloping demand curve mean...Ch. 3 - Will demand curves have the same exact shape in...Ch. 3 - Will supply curves have the same shape in all...Ch. 3 - What is the relationship between quantity Demanded...Ch. 3 - How can you locate the equilibrium point on a...Ch. 3 - If the price is above line equilibrium level,...Ch. 3 - When the price is above the equilibrium, explain...Ch. 3 - What is the difference between the demand and the...Ch. 3 - What is the difference between the supply and the...Ch. 3 - When analyzing a market, how do economists deal...Ch. 3 - Name some factors that can cause a shift in line...Ch. 3 - Name some farm that can cause a shift in the...Ch. 3 - How does one analyze a market where both demand...Ch. 3 - What causes a movement along the demand curve?...Ch. 3 - Does a price ceiling attempt to make a price...Ch. 3 - How does a price ceiling set below the equilibrium...Ch. 3 - Does a price floor attempt to make a price higher...Ch. 3 - How does a price floor 521 above the equilibrium...Ch. 3 - What is consumer surplus? How is it illustrated on...Ch. 3 - What is producer surplus? How is it illustrated on...Ch. 3 - What is total surplus? How is it illustrated on a...Ch. 3 - What is the relationship between total surplus and...Ch. 3 - What is deadweight loss?Ch. 3 - Review Figure 3.4. Suppose the government decided...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Consider the demand for hamburgers. If the price...Ch. 3 - How do you suppose the demographics of an aging...Ch. 3 - We know that a change in the price of a product...Ch. 3 - Suppose there is a soda tax to curb obesity. What...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Suppose both of these events took place at the...Ch. 3 - Must government policy decisions have winners and...Ch. 3 - Agricultural price supports result in governments...Ch. 3 - Can you propose a policy that meld induce the...Ch. 3 - What term would an economist use to describe what...Ch. 3 - Explain why voluntary Martians improve social...Ch. 3 - Why would a free market mar operate at a quantity...Ch. 3 - Review Figure 3.4 again. Suppose the price of...Ch. 3 - Table 3.8 shows information on the demand and...Ch. 3 - The computer market in recent years has seen many...Ch. 3 - Table 3.9 illustrates the markets demand and...Ch. 3 - Table 3.10 shows the supply and demand for movie...Ch. 3 - A low-income county decides to set a price ceiling...
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Similar questions
- Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.arrow_forwardWhat is consumer surplus? How is it illustrated on a demand and supply diagram?arrow_forwardHow does a price floor 521 above the equilibrium level affect quantity demanded and quantity1 supplied?arrow_forward
- Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. What is the quantity demanded and the quantity supplied at a price of 210? At what price is the quantity supplied equal to 48,000? Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from line table? What HIE die equilibrium price and equilibrium quantity? If the price was 120, what would the quantities demanded and supplied he? Would a shortage or surplus exist? If so, how large would the shortage or surplus he?arrow_forwardWhen analyzing a market, how do economists deal with the problem that many factors that affect the market are changing at the same time?arrow_forwardWhat is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?arrow_forward
- In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve?arrow_forwardIn the financial market, what causes a movement along the demand curve? What causes a shift in the demand curve?arrow_forwardThe weekly demand and supply schedules for T-shirts (in millions) in a free market are as follows: Price Quantity demanded Quantity supplied 8 6 18 7 8 16 6 10 14 5 12 12 4 14 10 3 16 8 2 18 6 1 20 4 4.Assume that changes in fashion cause the demand for T-shirts to rise by 4 million at each price. What will be the new equilibrium price and quantity? Has equilibrium quantity risen as much as the rise in demand? Explain why or why not. 5.Now plot the data in the table and mark the equilibrium. Also plot the new data corresponding to (b).arrow_forward
- A market consists of groups of buyers and sellers of a good or service. Market equilibrium represents the price at which the quantity of goods supplied is balanced with the number of goods consumers are willing and able to buy. Consider the market for coffee: Assume first that there is a heatwave that damages a large portion of coffee beans. Describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity? Last, extend your analysis to the long run, a period of time long enough for new coffee growers to enter the market or for existing growers to exit the market. How might equilibrium price and quantity in the market for coffee be affected when enough time is allowed for a change in the number of sellers in the market?arrow_forwardHow will the following event(s) affect demand and/or supply and equilibrium price (p*) and equilibrium quantity (q*) in a competitive market? Please describe whether the demand and/or supply curve shift right or left and the final impact on equilibrium price (P*) and equilibrium quantity (q*). You must say whether equilibrium price and quantity will go up, down, or if it cannot be determined (indeterminate or “?”). Market: paint. Event: a hailstorm forces some of the paint manufacturers to shut-down.arrow_forwardSuppose ManTown demand and supply curves for oil is given by ? = 500−4? ? = −100+6? a) Determine which one is the supply b) Calculate the equilibrium price and quantity c) Suppose that ManTown demand changes to ? = 600−4?.Find the new equilibrium price and quantity. e) Compare what happens to equilibrium quantities and prices in questions (b) and (c)? f) From equation (1), if the current price is 110, describe what happens to quantities and prices of demand and supply in this market?arrow_forward
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