ESSENTIALS OF ECONOMICS
11th Edition
ISBN: 9781260225334
Author: SCHILLER
Publisher: RENT MCG
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What happens in the graph when the price of bottled water rises? What happens when the price of flavored water( a subsistute in production for bottled water) rises? When the price of bottled water rises, _____. When the price of flavored water rises, ____.? A. There is a movement along the supply curve; the supply curve shifts rightward. B. The supply curve shifts leftward; there is a movement down along the supply curve. C. The supply curve shifts rightward; there is a movement up along the supply curve. D. there is a movement up along the supply curve; the supply curve shifts leftward.
As more and more people bought home computers during the 1990s, the demand for access to the World Wide Web and the Internet increased sharply. At same time, new companies like Earl's began to enter the internet-access market competing with older, more established services such as American Online. Despite a massive increase in demand, the price of access to the Web actually declined.
Change in demand?
Change in supply?
Change in market equilibrium price?
Change in market equilibrium quantity?Graph?
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Assuming that a few firms control gasoline supply and talk to each other to reduce supply, what happens to price and their total revenue? Graph and explain.
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- Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?arrow_forwardSuppose the state of Florida responds to the demands of nature lovers and bans all billboards along the roads and highways. What effect would such a ban have on the prices of motels, restaurants and other services previously advertised on billboards? Would such a ban increase the amount of time travelers take to find a place to eat or sleep?arrow_forwardThe X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. a. How will the demand for good X change if consumer incomes decrease? b. How will the demand for good Y change if consumer incomes increase? c. How will the demand for good X change if the price of good Y increases? d. Is good Y a lower-quality product than good X? Explain.arrow_forward
- Before economic reforms were implemented in the countries of Eastern Europe, regulation held the price of bread substantially below equilibrium. When reforms were implemented, prices were deregulated and they rose dramatically. As a result, the quantity demanded for bread dramatically fell and the quantity supplied for supplied rose sharply. Change in demand? Change in supply? Change in market equilibrium price? Change in market equilibrium quantity? Graph?arrow_forwardIs the seller a price leader (sets new pricing levels in the market), or a price fol-lower (only matches price increases/decreases when the competition does so)?arrow_forwardYou stop by a crafts fair and you notice consumershaggling with vendors over prices. What does thistell you about the competitiveness of this market?Suppose you plan to go to a farmers’ market next.Do you expect to find more or less haggling at thismarket than you did at the crafts fair? Why?arrow_forward
- If we assume that Coke and Pepsi are substitute products, what would happen to the supply and demand for Pepsi if Pepsi raised their price? What would happen to the supply and demand for Coke if Pepsi raised their price? (Be sure to think about what consumers would do and what effect their behavior has on demand. Then think about in the long run what the companies would do to adjust to any changes in demand)arrow_forwardThe following relations describe the supply and demand for posters. QD = 65,000 - 10,000P and QS = -35,000 + 15,000P where Q is the quantity and P is the price of a poster, in dollars. a. Complete the following table. Price Qs Qd surplus or shortage $6.00 5.00 4.00 3.00 2.00 1.00 b. What is the equilibrium price?arrow_forwardWhy would firms raise the price if there is a market shortage, and why would some consumers pay that higher price. At what point would firms stop raising the price?arrow_forward
- Consider the market for the wooden yoyo, if the price of wood increases. Change in demand? Change in supply? Change in market equilibrium price? Change in market equilibrium quantity?Graph?arrow_forwardWhen prices rise, why are suppliers/firms willing to increase output? When prices rise, why are suppliers/firms able to increase output?arrow_forwardSuppose that Carlos and Deborah are the only consumers of scented candles in a particular market. The following table shows their annual demand schedules: Price (dollars per candle) Carlos’s quantity demanded Deborah’s quantity demanded 2 16 32 4 10 24 6 6 16 8 2 8 10 0 4 Find the market demand schedule.arrow_forward
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