Pearson eText Microeconomics -- Access Card
2nd Edition
ISBN: 9780136849513
Author: Acemoglu, Daron, Laibson, David, List, John
Publisher: PEARSON
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Question
Chapter 4, Problem 4P
(a)
To determine
Shift in the demand curve of the housing market due to a prosperous economy.
(b)
To determine
Explain shift along the supply curve.
(c)
To determine
Direction of shift in supply curve caused due to reduction in input costs of construction.
(d)
To determine
Results of a rightward shift in both supply as well as demand curve.
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The following graph shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge—in this case, the speed with which manufacturing robots can fasten bolts, or robot speed—and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour.
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Pearson eText Microeconomics -- Access Card
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